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Ohio studies vehicle-miles tax to replace or supplement fuel tax
Lynn Ischay/The Plain Dealer
The state is studying ways to implement a vehicle tax that would tax drivers on now much they drive on a yearly basis.
Imagine being taxed on the number of miles you drive instead of the amount of gasoline you buy.
Oregon has tried it. North Carolina is thinking about it, and Ohio is exploring an idea to replace or supplement the state's existing fuel tax with a vehicle miles tax.
The Vehicle Miles of Travel tax is being hailed as an innovative way to generate transportation revenue by states that have seen gasoline tax dollars stagnate because of people driving less and cars becoming more fuel efficient.
A task force that studied Ohio's transportation needs said that a mileage tax has the potential to raise revenue and that the state should look into the idea.
"Most people on the task force agreed that we need to invest more in our infrastructure, but if you want to do that, how do you raise funds in a fair and equitable way?" said David Beach, who was on the state panel. "With new technology, it becomes feasible to have different ways to collect taxes."
The task force's main recommendation for increasing revenue is to raise Ohio's current 28-cents-a-gallon gasoline tax by 13 cents to pay for roads, bridges and transportation. But Gov. Ted Strickland has said he would not support a tax increase.
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Bonnie Teeuwen, deputy director of the Ohio Department of Transportation district that includes Cuyahoga County, said she has volunteered the district to try out a mileage tax.
And transportation officials for the federal government and more than two dozen states, including Ohio, have contacted Oregon's Department of Transportation -- considered the leader in mileage tax issues.
The Transportation Department and Oregon State University tested a Road User Fee in a pilot project in 2006.
A dashboard display, a GPS receiver and antenna, a mileage counter unit and a short-range-radio-frequency antenna were placed in 285 vehicles. The counter tallied miles a person drove in the state.
Two Portland gasoline stations were equipped with mileage-reading devices. So when a driver pulled up to the gas pump, a radio wave transmitted information from the car to the pump, which sent that information to a computer in the gas station office. The driver's receipt from the pump showed the gas tax was removed and the mileage tax added. The driver paid the amount due.
Under the pilot program, drivers were charged 1.2 cents a mile, which was considered equivalent to the state's 24-cents-a-gallon gas tax rate. That amount could be higher to raise more revenue. There could be an additional cost to people who drive less fuel-efficient cars, like SUVs.
"For the consumer it was seamless. It was exactly the same as pulling up to the pump and getting a receipt that had the mileage fee and the gas tax fee, with the deduction of the gas tax fee," said Shelly Snow, spokeswoman for the Oregon Transportation Department, which has studied the mileage tax since 2001.
Oregon's project, which received $2.1 million from the Federal Highway Administration and $770,000 from the state, ended in 2007, but officials decided further study was warranted. Gov. Ted Kulongoski included a proposal in the new state budget to fund a program to look into how a mileage tax could be added, Snow said.
"We found the concept was feasible but there are several key things that would have to be done or researched further before anything like this could be put into practice," she said.
Potential obstacles: costs, managing data
Imposing the tax through gas stations worked, but the cost would be too high to retrofit all vehicles with the equipment, said Snow. The gear could be put in new vehicles by manufacturers.
"That's one of the reasons this concept is still years down the road," she said.
Another obstacle is how to gather the information and collect the mileage fee at a minimal cost to the state and without causing headaches for motorists, such as filling out paperwork.
Ohio's 28-cents-per-gallon gasoline tax pays for road and bridge repairs. ODOT receives about 17 cents of the tax, or about $1 billion a year in revenue. The remainder of the tax goes to counties, cities, townships and agencies.
"When it was first instituted, the gas tax really was a good way of assessing a user fee to the roadway system," said Scott Varner, ODOT's deputy director of communications. "The thought was the more gas you use, the more driving you were doing and the more roads you used."
But as fuel-efficient vehicles were developed, there was a disparity between vehicles that got good gas mileage and those that didn't, Varner said.
"It is a very fascinating idea to somehow find a way to better track how much someone truly uses the roadways," he said.
Beach, director of the Cleveland Museum of Natural History's GreenCityBlueLake Institute, which promotes environmental programs and sustainability, said that as a driver, he doesn't know if he would support a mileage tax until more details were available.
"I wouldn't want a mileage-based gas tax if it meant I had to pay the same for my small, fuel-efficient car as someone with a big gas guzzler," Beach said.
Beach said that instead of coming up with more taxes, the state should work to break the cycle of automobile dependence.
"The problem with both a volume-based [gas tax] and mileage-based tax is that it gives ODOT an incentive to promote more driving to obtain more revenue," he said. "We need to develop a more balanced transportation system that gives people more choices."
Monitors would create privacy issues, Ohioan says
Robert Brown, treasurer of Case Western Reserve University and a member of Ohio's transportation task force, said placing transponders in cars raises several serious issues.
"There are some privacy issues because essentially somebody or some machine somewhere needs to kind of know where your car is," said Brown, a former assistant director of ODOT. "Also, how do you ensure that if a transponder is built into every vehicle that it is not tampered with? There are an awful lot of policy issues for people to grapple with."
Brown said he supports increasing the gas tax instead.
In the past year, department officials in Oregon have traveled the country giving presentations about the mileage tax, including one to the transportation task force in Ohio, said Snow, of the Oregon Transportation Department.
"It is clear a new source of revenue other than gas taxes is needed to help states repair, maintain and build roads and bridges," she said.
A mileage tax might not be enacted, she said, "but it might bring other things about and open people's minds to something else."
http://blog.cleveland.com/metro/2009/01/ohio_studies_vehiclemiles_tax.html
Personally, I'm not a big fan of this idea seeing as I drive about 50 miles/day. Any thoughts?
