The Long Haul To a Road User Fee

This post was originally published on National Journal‘s Transportation Experts Blog. You can read the full forum here.

Background and Question

Now that the furor over the highway bill has died down, transit guru Rep. Earl Blumenauer D-Ore., senses a moment of reflection is upon us. With some two years to play with until the highway trust fund runs completely dry, policymakers have a chance–but not too much of one–to act on what Blumenauer sees as a fundamental truth: “Transportation reform is what we have to do.” That means the gas tax is going to have to go away and be replaced with a “road user fee”–a more sophisticated way of charging people to drive on the roads based on mileage rather than gas usage.

Oregon is in its second year piloting a project to test how such a road fee would work, and its director will be in Washington next week to discuss the experience. The hope, according to Blumenauer, is that policymakers will realize they are out of options other than this one.

The idea of precisely tracking miles has raised security concerns, but Oregon’s pilot study will explore a variety of options: a device that simply tracks all miles traveled without location information, one that synchronizes with a smartphone; and another that includes a GPS unit. Blumenauer also suggested another: letting drivers simply check in annually and pay some per-mile fee.

Is there potential for action on a road user fee? What is to stop Congress from simply putting its head in the sand until the “cliff” is almost here? Is the technology there? Can the privacy concerns be overcome?

Response

Let A Hundred Flowers Bloom

By Emil Frankel

There is a broad consensus that motor fuels taxes no longer serve as effective proxies for use. Moreover, dwindling political support has made it difficult to increase them to rates that are adequate to support appropriate investment in the nation’s transportation system. These circumstances would seem to demand reform, in order to establish a sustainable revenue stream for transportation, but the political will in most places — certainly, at the federal level — is lacking.

While it is quite unclear that there will be a “grand bargain” about the nation’s budget deficits and rising national debt any time soon or that such a grand bargain, if it were to be achieved, would include addressing user-based revenue for transportation investment, it seems clear to me that the transportation funding issue will only be addressed in the context on the resolution of these broader fiscal matters.

Even then, the shift to more direct and sustainable forms of user-based revenues, such as a vehicle miles traveled (VMT) fee, would seem to face daunting political challenges. It is hard to believe that a Congress that has not increased the federal gasoline tax for 20 years — and won’t even mention the issue today — will be any more prepared to put in place a federal VMT charge, than it is to raise the gasoline tax. The political and technical hurdles would seem to make this transformation unlikely in the next few years.

However, in this federal system of ours, one can imagine that such a funding reform might occur “bottom-up,” rather than “top-down.” As noted in the question, experiments, demonstrations, and pilot programs are now underway in some states (even if very limited in size and scope). Just as the gasoline tax was first introduced at the state level, and only later implemented by the federal government, a similar trend may occur with VMT fees. Indeed, I am optimistic that, while there will be political challenges and hurdles at the state (as well as at the federal) level, many states will begin, step-by-step to transform their revenue and funding streams. They will do so, because they will have few, if any, reasonable alternatives.

So, if this is to be the trend, what is the role of federal policy? Most importantly, the federal government should “get out of the way” of such exercises of state discretion and demonstrations of state initiative. Federal barriers to the introduction of user-based revenue measures at the state, metropolitan, and local levels (such as the prohibition on tolling Interstate highways and discouraging the impositon of user fees on existing capacity) should be removed or, at least, substantailly reduced. Indeed, national tranpsortation policy should encourage these innovations at the state level through federal incentives and bonuses to reward such actions.

Road user fees are, necessarily, the wave of the future, but only if we are serious about building upon, and taking advantage of, the strengths and the spirit of innovation that have characterized our federal system of government.