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Vehicle miles traveled (VMT) tax would be worse than a gasoline tax

Updated: February 24, 2014 11:40PM

Gas tax revenues are declining as people drive less and more fuel-efficient new cars require filling up less at the pump. That saves people money, reduces pollution and lessens America’s imports of foreign oil.

That means less money, however, for needed transportation infrastructure improvements that are vital to Illinois’ economic growth, public health and safety. Potholed streets everywhere, aging public transit and commuter rail equipment, and deteriorating bridges across the state are frustrating, dangerous and embarrassing.

Many politicians oppose raising the motor fuels taxes. So, Oregon is piloting a different approach for 5,000 volunteer car owners beginning July 1, 2015: shifting from gas taxes to vehicle miles traveled (VMT) taxes, which charge motorists based on how many miles they travel on the roads. An onboard vehicle device, using GPS or other technology, records the distance driven, assigns it to the appropriate taxing jurisdiction, and calculates the tax amount owed. Illinois is exploring types of VMT taxes for trucks.

There are obvious and very relevant differences between applying this system for cars versus trucks. Many truck fleets have the technology installed, which operates on an interstate basis, and there are fewer concerns about privacy. For car owners, this requires installing potentially costly new technology, and many people have serious privacy concerns about having their daily driving patterns and locations tracked and provided to governmental agencies, as well as to private sector vendors.

For cars, the VMT tax approach doesn’t work well in practice in states like Illinois, which has highways that are the nation’s crossroads used by millions of out-of-state drivers each month.

First, Illinois’ highways are the crossroads of America — that’s different than coastal Oregon. Changing to VMT taxes here would mean that out-of-state drivers who now pay Illinois gas taxes on their fuel purchases while using Illinois highways, such as I-55, I-57, I-70, I-74, I-80 and I-90 would instead get a free ride as they travel through. Illinois drivers would be forced to pay the entire VMT tax burden. That shift is obviously disadvantageous and unfair to Illinois motorists and taxpayers. Why would Illinois legislators want Illinois taxpayers to further subsidize highway use for out-of-state motorists?

Second, the VMT tax will penalize lighter fuel-efficient clean cars, which exert less impact on highways than trucks and SUVs. Why should a gas-guzzling Hummer, which causes much more wear-and-tear, pay the same road tax as a lighter, fuel-sipping Toyota Prius or Chevy Volt? Moreover, will heavy trucks pay their larger fair share?

The Congressional Budget Office’s March 2011 report, in comparing the relative merits of gas taxes and VMT taxes, emphasized the disproportionately high road wear from cargo trucks compared to what’s recouped by current gas tax levels: “Heavy trucks travel less than 10 percent of all vehicle miles, but their costs per mile are far higher than are those for passenger vehicles, and they are responsible for most pavement damage.” CBO suggested that VMT taxes, if adopted, should be adjusted to recognize weight-per-axle in properly allocating highway wear-and-tear to the cost causers, which are disproportionately heavy trucks and larger commercial vehicles.

Third, the VMT taxes would penalize new clean electric vehicles and hybrid cars, which pollute much less than internal combustion engine and diesel cars and trucks, and thereby provide air quality, public health and other environmental quality benefits for everyone. That penalty — the VMT tax versus gas tax — is contrary to and undermines the many Illinois policies and incentives enacted to promote electric and hybrid passenger vehicles. What’s the logic of providing tax credits to incentivize Illinois residents to purchase electric vehicles, but then shifting the road tax system to charge them more?

Fourth, the current tax is simple and inexpensive to administer at the pump. The system is already in place. The VMT tax requires that fairly costly new technology be installed in vehicles, and a new administrative system be created. The costs of operating and auditing a VMT system are higher than collecting gas taxes.

If legislators are reluctant to raise gas taxes, then why would the proposed VMT taxes be any more popular with the public? The gas and motor fuel taxes are both fairer and practically better suited to Illinois’ geography and public policies. For Illinois, the proposed VMT tax for cars is not the right tool to address transportation infrastructure funding challenges.

Howard A. Learner is executive director of the Chicago-based Environmental Law and Policy Center, at

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