Draft of White House Plan Mulls Mileage Tax, New Tolls

This story appears in the May 9 print edition of Transport Topics.

A draft of the Obama administration’s transportation reauthorization plan calls for creation of an office within the Federal Highway Administration that would spend six years studying a vehicle-miles-traveled tax to help fund the nation’s surface transportation system.

The draft also indicates that the administration is considering allowing states to toll existing interstate highways in metropolitan regions to raise revenue to reduce traffic congestion.

Both the White House and the U.S. Department of Transportation refused to comment on the draft, which apparently was leaked. Transport Topics obtained a copy last week.

Spokesmen for the DOT and the White House insisted that the administration has not finalized or released any part of the proposal that is expected to detail the $560 billion transportation reauthorization plan broadly outlined by President Obama in February when he unveiled his budget for fiscal year 2012.

“Somebody put a lot of time into writing this language, so I’m assuming that . . . this is a version of a bill that they are working on,” said Darrin Roth, director of highway operations for American Trucking Associations.

The 61-page draft — titled a section-by-section analysis of “The Transportation Opportunities Act” — may not be a final version, Roth said.

“But I think it’s safe to say that this reflects the direction that they are going. And if that is the case, we have several significant issues with it,” he said.

ATA opposes both VMT taxes, as they are known, and the tolling of exiting interstate highways.

If the Obama administration ultimately proposes taxing the number of miles Americans drive, the move would be a departure from the stance it took shortly after taking office in 2009.

When Ray LaHood, Obama’s transportation secretary, raised the possibility of a VMT tax in February 2009, the White House distanced itself, saying it was considering no such thing.

The draft bill referred to the Surface Transportation Revenue Alternatives Office and states that “the final outcome of the office’s six-year effort would be documented evidence of the feasibility of a nationally implemented mileage-based user fee system and recommendations for next steps leading to the potential implementation of such a system.”

The draft also reiterated what many transportation planners and activists have long said: With smaller, more fuel-efficient vehicles on the road, gasoline and diesel taxes will be a dwindling source of revenue.

ATA and other trucking industry groups, however, argue that it is more efficient and cost-effective to increase fuel taxes than it is to design and implement a new national tax-collection system that requires the design and manufacture of technological devices for cars and highways.

Many trucks, however, already have technology that tracks the number of miles traveled.

Roth said that the miles-traveled tax approach rests on the assumption that large numbers of cars and trucks in the future will use alternative sources of energy, which will further shrink fuel-tax revenues.

However, he said, “some of the market projections suggest that for electric vehicles, or even hybrid vehicles, that these types of vehicles will be a very small majority of the total vehicle fleet for at least the next 10 years.”

ATA is “absolutely” opposed to tolling existing interstate highways, except to convert HOV lanes to HOT lanes, Roth said.

“Tolls are far more expensive to collect than fuel taxes, he said. The collection cost for fuel tax is about 1%, and raising the fuel tax has zero costs because the system is already in place,” Roth said.

“For toll roads, even using the most advanced collection systems, collection costs can be anywhere from 12% to 20%,” he said.

The trucking industry’s biggest concern about tolling interstates is that many vehicles will switch to less safe, secondary roads, Roth said.

At least one state, Oregon, has already conducted a pilot program on collecting vehicle-miles-traveled taxes. And the federal government has funded at least one pilot being tested in several states.

The origin of the leaked draft is unknown, although sources speculated to Transport Topics that the document was leaked directly from a White House staff member to a lobbyist who gave it to a news organization.

Other sources said it is more likely the White House staff shared their reauthorization language with Democratic Senate staffers working on their own bills and that a staff person passed it to a reporter.

At least five Senate committees would have to approve legislative language in any reauthorization bill. On the House side, where Republicans hold the majority, Rep. John Mica of Florida, chairman of the Transportation Committee, is writing a bill.

Staff Reporter Timothy Cama contributed to this story.