If Congress doesn’t act soon, a key source of state highway funds could soon begin to dwindle.
The Highway Trust Fund, which provides most states with about half of their transportation money, will begin to dry up in the coming months, the Transportation Department recently warned. But even if Congress extends funding, the solution will likely only be temporary.
That’s because the fund suffers from some key problems that will only likely get worse. The fund is largely fueled by the federal gas tax, which hasn’t been raised since 1993. Even if lawmakers do raise the tax, though, environmentally friendly trends such as increased fuel economy of vehicles means lawmakers may soon have to find alternative funding sources.
A few alternative ideas have been kicking around for years, but only a handful have been tested in the real world. One of those is a Vehicle Miles Traveled fee, a way to more closely tie road funding to those who use it most and which Oregon has for years been exploring. We caught up with Oregon state Senator Bruce Starr (R) earlier this week as he and other state lawmakers were in town to lobby their federal counterparts to act. What follows is an abridged transcript of our conversation about the state’s VMT test.
Q: What exactly are you guys trying with the VMT?
S: In 2001, we passed a bill that basically says the legislature needs to find an alternative to the gas tax, recognizing that the gas tax is a declining revenue source. So we went through a process to look at options. The road-user charge ultimately was the place we settled.
We did a couple of pilot programs that we learned a lot from and so just this year we passed a bill that created the next pilot, where we’re going to have up to 5,000 vehicles where people will actually pay their road-user charge — pay for their road use via a per-mile charge — as opposed to the fuel tax.
I think that the most important piece of this is that we’re not building a huge government bureaucracy to accomplish this, we’re leaning on the private sector to do it. What we learned in some of our earlier pilots was people were very concerned about Big Brother, about government knowing where they’re driving, when they’re driving.
Q: What are some ways you can deal with the privacy concerns?
S: There’s a huge section of the bill that was negotiated with the [American Civil Liberties Union] to deal with the privacy issues and they were actually supportive of the bill as it moved forward. So the nation’s largest privacy protectors were right there at the table negotiating with us and are satisfied that the privacy protections that we have in Oregon are sufficient.
The big piece of that is really because government’s not the ones that are accomplishing all of the recording of the mileage. It’s done by a private-sector company. Yes, we have to be able to audit it to make sure that we’re getting paid what we need to be getting paid, but any of the data is not being held by government. I think that the private sector is well able to help to identify how many miles people drive and then collect the dollars from the public and remit them to the [Department of Transportation].
Q: Can you describe the options that people have in terms of actually measuring their road use?
S: We have a menu of options that folks can choose from.
One of them is really rudimentary. It’s a flat fee where they can just pay a flat amount and that’s it. They wouldn’t pay any per-mile road charge. Now that flat fee’s going to be pretty high because we don’t know how much people are actually going to drive if they use that.
The next step would be a low-tech kind of model where there’s no GPS component to it. So that would mean that you would potentially be charged for miles that you drove outside of the state of Oregon, but you would still be charged on a per-mile basis.
Q: Is that just like an odometer reading?
S: Pretty much, yeah.
And then you could choose to go one step higher, where you would have a GPS component, so that you would only be charged for the miles that you would drive in Oregon. Again, these are all accomplished not by a government program, but by partnering with the private sector.
Q: What’s the future of this? You have this 5,000-person pilot and then what’s next?
S: Well, other states are really where the action is right now. We have worked with a consortium of Western states that are very interested in partnering with what we’re doing in Oregon. My expectation is that while we’ll have 5,000 drivers in Oregon, we’ll have maybe several thousand more in other states as other state DOT’s and legislatures say let’s piggy back on what Oregon is doing.
In the long run, we need to just make sure that all of the pieces work before we go bigger and I think that’s important. We can’t get Congress to do much on this. I mean we can barely get them to keep the Trust Fund healthy, much less think about long-term issues of the viability of the fuel tax. But I believe as we have more and more examples of success at the state level and we kind of winnow it down to what really, really works at some point in the future Congress is going to [say] perhaps it’s time we adopt something that will cover the nation and at that point maybe require certain technologies in vehicles that are produced in some model year going forward.
What I expect is there will be a phase-in and a phase-out period. And it could be a long period of time — 20 years — as long as you have an older vehicle that continues to pay the fuel tax and newer vehicles would pay a road-user charge and ultimately the people who drive on our roads have to pay for them.
Q: Why isn’t it working as well?
S: It doesn’t work because you have Congress mandating higher and higher [Corporate Average Fuel Economy] standards, you’ve got alternative-fuel vehicles that are gaining more and more traction. Even without electric cars or hydrogen vehicles or cars that run on LNG natural gas, when you have vehicles that are getting 50 miles to the gallon, you’re still driving the same number of miles clearly you’re collecting less fuel tax and so that’s just the bottom-line issue.
People way smarter than me have looked at the data and it’s very clear, we’re driving more miles, we’re collecting less fuel tax, wear and tear still is happening on our roads system and we have to solve that problem.