Usage based road use fees

Global Position Satellites (GPS) are becoming more and more common in cars. Some systems use them for navigating in unknown territories, some for tracking traffic and reporting it to you, so that you can change your route before you get caught in the Highway to Hell. Another tracking device, The Inilex “Kepler Advantage” device, can tell you where your car is parked or if it has been stolen. Lo-Jack uses radio frequency technology, not GPS, to locate your car. Now, the Department of Transportation is looking into a device that will be able to tax you for the miles you drive, not the gas you use.  

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The pilot program is being tested in a number of states, including Oregon and Iowa. There were three programs Oregon focused on for replacing the fuels tax as the primary source of revenues for Oregon’s roads. The first was to leave the gas tax in place, at 24 cents a gallon. The reasoning there was for the cars that didn’t have a tracking device in their car and/or for cars that drove in from out of state. These vehicles would all pay the regular rate with taxes included.   

The second and third programs were to track your miles with a device in your car and everytime you fill up, the gas tax would be calculated and you would pay the amount you owe right there. The last two had different calculations involved, but the gas tax would be paid at the station and delivered to the federal highway repair fund.

The second was calculated using a 1.2 cent per mile, to basically simulate the same amount of gas tax received currently. For example, if your car got 20 mils per gallon and you drove 15,000 miles a year, you would use 750 gallons of gas. At $2.50 a gallon that would be $1,875.00. The second calculation would take the 24 cents a gallon out of the $2.50 (making it $2.26 a gallon) and calculate the 15,000 road mileage miles multiplied by 1.2 cents a mile.

The third would be for the person who lives in the congested metropolitan areas and drives during rush hours, but would like to change their habit’s. If you live in congested area you will be charged .043 a mile or $322.50 (based on 7,500 miles). Add in .10 per mile if you travel between the rush hours of Mon-Fri 7-9 and 4-6.

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Joanne drove about 2,700 miles from State College, PA to San Francisco, CA to visit her daughter, Liz. The Chrysler Sebring she drove got 25 miles to the gallon. Had the road use fee been in effect Joanne would have paid only $244.08 for gasoline. She would have paid $32.40 in road tax fee, $6.80 more than had she paid in the current system. Under the pilot program options, Joanne would be paying the bill separately, either by credit card on her next bill or at the end of the year on her DMV registration bill. If she drove 15,000 miles a year she would pay the road tax of $180 on her DMV registration, along with the cross country trip of $32.40.   

There are some pros and cons for taking the gas tax out of the gasoline equation and making it a vehicle miles traveled (VMT), or usage based fee.

The pros explanations for taking the Federal Highway gas tax out of the gas equation make sense;

1. When the price of gas goes up, people don’t buy as much gas, reducing the revenue from gasoline to fix the highways. The same thing with cars that get more miles per gallon. They buy less gasoline, but drive more, reducing the highway repair fund. Congress doesn’t want to raise the price of gas again and risk losing more revenue for the highways.

2. As new propulsion systems come onboard, i.e. electric, hydrogen, people won’t be buying gasoline, hence the highway repair fund will go down.

3. All states may not be the beneficiary of the revenue, even though you drove on their roads. For example, if you buy gasoline, say in Nebraska, and drive through Iowa to Illinois, you may have filled up in Nebraska at the state line, crossed all the way through Iowa to Illinois before you needed gasoline again. You used the highways in Iowa, but you didn’t pay for any of the road repair.

The cons on using this system aren’t as many, but need to be addressed because they involve privacy issues and a disproportionate amount of taxes being paid by the highest mileage vehicles.

1. Dr. David Forkenbrock, Director Public Policy, University of Iowa, is a self-professed privacy protection freak. Forkenbrock says one of the biggest issues that he has addressed with Congress and his staff is the issue of privacy. Forkenbrock says the device used in the Iowa study could not be used for tracking and he would find it morally repugnant that if the Department of Transportation didn’t use Iowa’s geographic info system (GIS) and used a device that would allow tracking. The GIS uses a data file and stores a value, not the actual car information.

Forkenbrock says there are different ways to collect the tax, including credit card, DMV registration, which all begs the question, if you have a tracking device, or GIS, according to Forkenbrock, that encrypts the information so that no one can tell what car was being used, how are you billing them, without knowing that information? What does someone do if they can prove they weren’t in that area? Forkenbrock has tried to engineer privacy into the UOI device, but it is not guaranteed that Congress will use that device or adhere to privacy guidelines.

According to an article written by Declan McCullagh, CNET News.com’s chief political correspondent, “The problem, though, is that no privacy protections exist. No restrictions prevent police from continually monitoring, without a court order, the whereabouts of every vehicle on the road.”

“No rule prohibit’s that massive database of GPS trails from being subpoenaed by curious divorce attorneys, or handed to insurance companies that might raise rates for someone who spent too much time at a neighborhood bar. No policy bans police from automatically sending out speeding tickets based on what the GPS data say.”

McCullagh ended the article by saying, “The Fourth Amendment provides no protection. The U.S. Supreme Court said in two cases, U.S. v. Knotts and U.S. v. Karo, that Americans have no reasonable expectation of privacy when they’re driving on a public street.”

2. The second con is that the gas tax is based on people whose cars get 20 mpg. If your car gets 20 miles per gallon you are going to break even on the gas tax, and for 15,000 miles you will pay $180.00, the same as if you bought 750 gallons of gas. If you own a Hummer and get 8 miles to the gallon you would normally pay $4,418.50, but under the pilot program you’re still going to pay $180.00 for taxes and only $2.26 per gallon. You would have paid $450.00 in taxes had you bought the gas with the gas tax included in the gasoline, saving you $270.00.

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The real rub comes to the greenies that think they are doing the best they can to help the earth. Let’s say you own the Toyota Prius that in 2008 is slated by the EPA to get 46 miles per gallon. At $2.50 a gallon for 15,000 miles you would only pay $916.76. Of that, $78.24 cents would have been sent to the Federal government for highway repairs. Under the new concept, the Prius would be paying $180.00, $101.76 more than if they just paid the $2.50 a gallon.   

The question would be whether road tax should address the emissions part of the problem. Caltrans says that there isn’t any difference between the road damage caused by a Prius or a Hummer. The road damage comes from semis and heavier vehicles.

Another question is, can there be a system that acknowledges gas guzzlers without making this device something that has to track more than the data file, but the actual car it’self, which could lead, as McCullagh fears, to a disintegration of privacy. Back in 1936 the government started issuing Social Security numbers for federal tracking, but now they are being used as a national identification number.

One group that Dr. Forkenbrock, Director Public Policy, University of Iowa, said wasn’t paying – and costing the federal fund – were farmers. Farmers have their on diesel station on their property and don’t have to pay road use tax because the equipment is used on their private farm, not on the public roads. But farmers are filling their vehicles with that diesel and driving on the roads – Forkenbrock estimates that the federal government is losing $5-7 billion dollars a year of their $80 billion dollar a year budget.

As Forkenbrock said, “When you’re talking about $80 billion dollars, you better make sure you’re doing it right.”

By | 2017-03-22T08:07:26+00:00 March 7th, 2007|Categories: Automobiles and Energy, Gas Tax, Technology, Travel|0 Comments

About the Author:

Lou Ann Hammond is the CEO of Carlist and Driving the Nation. She is the co-host of Real Wheels Washington Post carchat every Friday morning and is the Automotive, energy correspondent for The John Batchelor Show and a Contributor to Automotive Electronics magazine headquartered in Korea. Hammond is a member of the North American Car and Truck of the Year (NACTOY), Women's World Car of the Year (WWCOTY), and the Concept Car of the Year.

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