The White House Council of Economic Advisers (CEA) said a vehicle miles traveled, or VMT, tax could be an efficient way to ease congestion and pay for President Donald Trump’s infrastructure plan.
CEA released an infrastructure report on Wednesday, claiming Trump’s infrastructure plan could boost annual economic growth between 0.1 and 0.2 percent over 10 years. Trump’s plan includes reforms to streamline environmental permitting and federal funding to leverage $1.5 trillion in spending over 10 years.
But one major snag the White House has yet to address is how to fund $200 billion in new federal spending.
Trump allegedly endorsed a gas tax during a bipartisan meeting in February. Some Republicans want their party to take the issue seriously, but GOP Oklahoma Sen. Jim Inhofe called it “wishful thinking.”
Americans are split on raising the gas tax. A recent Quinnipiac University poll found 46 percent of Americans thought raising the gas tax was a good idea, but 44 percent did not support it. Support for a gas tax hike has actually shrunk since last year, according to the poll.
Conservative groups have come out against a gas tax increase, arguing it would wipe out some of the tax cuts Congress passed last year. Democrats largely support raising the gas tax.
The CEA’s report addresses funding plans for an infrastructure build-out, suggesting a range of fees to “encourage efficiency in use, provide signals from consumers and to suppliers about the value of future investments, and generate revenues.”
But not all fees are equal, according to CEA’s report.
CEA said “fuel taxes have historically acted as imperfect user fees, but conventional funding models are now under pressure from rising fuel efficiency and the use of electric vehicles, and congestion costs are high and rising in many urban areas.”
To get around electric vehicles and increased fuel efficiency, the report suggests a “user fees for vehicle miles traveled—as are being piloted in Oregon, for example—and highway tolls that vary with congestion can increase efficiency and raise needed revenues to pay for infrastructure improvements and additions to capacity.”
Oregon began its VMT pilot program in 2015, charging drivers 1.5 cents per every mile they drove. Mileage data is collected through a special device installed in your car, and participants got refunded for any gas taxes they had to pay.
Oregon’s program does not count mileage driven out of state. Officials claim the program should end up costing drivers the same as a gas tax, assuming their car gets 20 miles per gallon. The idea is to find a new way to pay for roads that isn’t subject to changing technology.
Cars are continually becoming more fuel efficient, and electric cars don’t use gasoline, so they don’t pay the gas tax. Hybrids also cut into gas tax revenues.
Tolls on I-66 linking Northern Virginia to Washington, D.C. now vary with the flow of traffic. The idea is that tolls will go as high as the market will bear, which is already setting off commuters.
I-66 tolls hit $40 during the morning commute into D.C. in December. That was just one day after the toll topped out at more than $34. Tolls on I-66 change every six minutes based on commuter demand and current congestion.
While it does cut down on congestion, it’s not exactly a favorite of commuters. Virginia Transportation Secretary Aubrey Layne fired back at critics of the new tolling structure.
“No one has to pay a toll. You simply could have put another person in your car and avoid a toll,” Layne told The Washington Post.
“This is fair to everyone because everyone has a choice,” she said. “And that is why we did this. We wanted to change behavior, we don’t have the resources to continue to lay asphalt and have congested roadways.”
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