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Mileage fee or Gas tax – to pay for roads

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  • #2566

    Mrityunjay Singh
    Participant

    by Doug Caruso The Columbus Dispatch, Ohio August 02, 2010

    For decades, paying for roads has been fairly straightforward.

    Motorists pay at the pump through gasoline taxes. It’s more or less fair, too: The more you drive, the more you pay.

    But more and more, people involved in transportation planning and construction say that model is breaking down as many vehicles get better gas mileage or don’t use gasoline at all.

    They say state and federal governments eventually should switch to a system that charges a tax based on how many miles you drive, not how many gallons you consume.

    As gasoline-tax revenue stagnates, the idea is to institute a true user fee tied to miles driven.

    It was a major recommendation in 2009 when a 60-member panel met to discuss Ohio’s transportation future. Gov. Ted Strickland hasn’t taken up the idea, said Scott Varner, a spokesman for the Ohio Department of Transportation, but it hasn’t been dismissed, either.

    “There are a lot of examples around the country about how it can be done,” Varner said. “But there are still a lot of questions about it.”

    In a time when global-positioning systems can track exactly where you go, how much would the government know about where or how far you drive? Could cities demand a share for the mileage you drive on their streets? Could it cost more to drive at rush hour? Would collection be as seamless as the gasoline tax?

    The Oregon Department of Transportation tested replacing the state’s gasoline tax with a vehicle-miles-traveled, or VMT, tax.

    Readers on gas pumps accessed computers mounted in volunteer participants’ cars to download information about how many miles the car had traveled in different tax zones. There was one charge for miles traveled in a zone in and near

    Portland and a lower rate for miles driven in other parts of the state.

    The system didn’t keep track of the actual route taken or when the trip was made.

    The main problem for those who build and maintain roads is that gas-tax collections have dropped off or stagnated. The poor economy means people are driving less and vehicles are getting better gas mileage.

    Since 2008, Congress has added billions of dollars in non-gas-tax money to transportation funding to make up for shortfalls in gas-tax revenue. In 2009, the federal stimulus also covered the gap.

    In the short run, Congress should increase the gas tax, said Chester Jourdan, executive director of the Mid-Ohio Regional Planning Commission, which helps plan transportation projects in central Ohio.

    “The Congressional Budget Office has said there’s a $234 billion funding gap that exists between the current funding levels and the needs that are out there,” Jourdan said. “There’s this big gap, and currently there’s no real viable means other than raising the gas tax to fill that gap.”

    A VMT tax is an alternative that should be considered for five to seven years out, he said.

    We try to have it both ways: We have a national policy of increasing fuel economy and moving to non-gasoline vehicles and a system for funding highways that depends on fuel consumption.

    “Every major manufacturer will have an electric vehicle out by 2012,” he said. “These things will be in our communities. We’ll have alternative fuel sources like (compressed natural gas) that aren’t tied to how we fund highways.”

    The key is to replace the gas tax, not add to it, said Matt Mayer, president of the Buckeye Institute, a conservative research group in Columbus.

    Ohioans now pay an 18.4-cents-a-gallon federal gasoline tax and a 28-cents-a-gallon state gasoline tax.

    “We have a federal and state gas tax,” he said. “Do the other ones get eliminated? Is part of it to drive people out of their cars and onto this mythic train we’re going to build?”

    He said he hasn’t studied mileage taxes, but he has looked at what’s happening with gasoline taxes.

    “There’s an issue of declining fuel consumption because of greater mileage and how that impacts our ability to fund structures,” he said.

    Copyright (c) 2010, The Columbus Dispatch, Ohio. Distributed by McClatchy-Tribune Information Services.

    I’m curious to hear how countries around the world are handling this.

    Paul Orlowski

  • #5522

    Anonymous

    This Ohio article around US road infrastructure problems & trying use mileage VMT tax to pay for it is definitely not good template to use/compare and then go checking around the world on how they do it!  It is more an example of how journalism is dummying down news and facts in spite of having greater access to facts and information from the internet/computer age. Perhaps it is just as well newspapers are going out of business  – with articles like this.
    The US road system has never paid as it goes thru pump taxes and US vast infrastructure has drifted into a huge crisis as a result. The average Joe American only drives 14,000 mile/year even when he has a job unlike todays economy and that includes the long drives for vacation/visiting relatives. And 80% damage to our roads is done by the trucks not cars traveling upon them  –  what has to be replaced in 2-5 years do heavy loaded trucks tearing up roads would have lasted nearly 20 years if only cars traveled on them.  And that is ok the US has to subsidize our trucking system to keep us competitive;  because the key to past US competitive edge in mfg goods, products & exports is World-class road & rail infrastructure. We have large land continent and our road and rail system is so vast it actually acts as land bridge allowing products to move across it much faster than shipping lanes would take (top distance for ship is ~200-250 nautical miles in day) and puts perishable produce to market anywhere in less 7 days it takes to start spoiling.  
    But it takes a large portion of US GDP & taxes dedicated to this infrastructure for growth, repair & replacement and we just havent done it last forty years for large number of reasons so now it is crisis, despite hiking many multiples of tax rates on gasoline/diesel at both fed & state levels.
     Incompetent and Crooked politicians at Federal, State, City & local levels are one the most inefficient ways of getting a needed investment dollar to the goal. You have only to look at current state of politics where Democratic leaders were swept into office promising to clean up corruption in all areas and all that happened is label switch on party being indicted.
    Ohio is good example of state that has crisis of investment on infrastructure it has lot big cost items like bridges that have to be replaced having aged. Several bridges have collapsed in US upper Midwest and its estimated nearly 20%+ more are in danger (some 23,000!) and look at what small portion of the Stimulus Shovel Ready dollars went towards any US road investments (less 200 bridges targeted very few of many in Ohio & West Virginia where only about 1 in 4 are being replaced closing down lot interstate product moves).
    As mentioned before nearly 80% damage done to roads is from trucks where VMT could never pay for separate system/alternate roads except around few cities where budgets went critical & were forced to save congested/intercity vehicle roads. Not mentioned in the article is fact that one sided NAFTA program has increased import truck traffic by some 300% in US over last 10 years because of shift of imports from ship vessels into truck & rail modes   so now we are subsidizing Mexico & Canada truck infrastructure requirements.  This is due get lot worse if / when US roads get opened to Mexican trucking that has bad record on overloading and unsafe driving.
    Even when states try use toll way roads to pay for new infrastructure instead of relying on the VMT fuel taxes the problems with corruption comes back into play. Oklahoma has been poster state for this it is nearly impossible to leave the state without going on one of toll roads that should have paid out in 10-15 years but are pushing 40 years of collection now. The number of state politicians and authorities that have been arrested is truly legion in number over the past 30 years.
    Not that we are the only countries to have these problems Europe probably has one of the highest VMT tax programs where some 70-80% taxes from $6-10/gallon fuel goes towards government for infrastructure and yet they have no intercontinental truck/ rail freight system (ships have to offload cargo at large ports to small vessels to deliver at limited / small ports) and instead rely on Ship Short Sea Feeder network.  The vehicles are all much smaller & get higher mileage and often travel less than US counterparts due efficient passenger rail system (whose priority is also why they do not have rail freight option) but makes their trucked goods higher/less competitive than other countries.
    China has made the largest increase in all modes of travel infrastructure but since they are buying $80-140/Bbl crude but capping gasoline & diesel prices below $0.87-1.0/gallon there is no question of support from VMT here. The investment is all driven by government and over the last 10 years has taken a road system where lest 40% of roads were paved, no interstate highways, and 7 different rail systems that could not link due different track size and shoved it into large network to support the growing inland movement of manufacturing plants.
    Despite all claims of lost jobs to China that will never return I suspect if you gave truckers fuel at $1/gallon, subsidized US refining every year $billions to make it & freed every plant from ANY environmental investment .youd have position all US fire trucks to hose our system down to keep growth from overheating !
     Think that is enough comparison to show the authors take is pretty much FUBAR as answer …….. and we didnt even get to part that adding methanol wipes out any MPG improvements the still solvent US car mfg can make, or that electric cars being shoved down our throats wont pay any VMT or pay for stations to be converted to supply electric charge, or pay utilities for big increase substations required neighborhoods for all cars being plugged in.

  • #5520

    Charles Randall
    Participant

    RE: Ohio Mileage fee -(VMT) Tax news article.
     
    I forgot to mention one other item on previous post (where I was not logged in evidently – course comments should identify me by now).
     
    But there is probably a much more important question that was not raised in the VMT article and that is:
    Should we be replacing road infrastructure where they have been & past population densities or shouldn’t we be planning to build them where they are likely to be needed in the future around the faster growing cities/states?  (This should also be important planning question for refineries/cokers and all new plants/expansions as well). We retiring baby boomers are unlikely to remain in high tax states, large cities/surburbs with high crime rates or weather threats and seek higher quality of life in retirement.
     
    The baby boomers (circ 1946-1960) have impacted every phase of they have moved thru and as they move (currently word would be shoved) into retirement and out of the peak consumer spending group (~40-50) ….. the echo boomers that replace them are a great deal fewer – in fact they have lot to do just meet population expectations on family size.
     
    Additionally the whole world is just waking up to fact that most of larger nations populations in the world are not replacing themselves. The TFR (Total Fertility Rate = number children woman bear in lifetime) has fallen below 2.1 level it must be to replace existing people/workers.
    <See:  Demographics of Depopulation and Real America; Birth Dearth – Ben Wattenberg and/or Empty Cradle; Falling Birthrates threaten World Prosperity – Philip Longman (see:  http://www.amazon.com/Fewer-Demography-Depopulation-Shape-Future/dp/1566636736 )
     Demographics & Economy/ Demographic trends – Is the future already in place? ( see: http://partners4prosperity.com/demographics-economics ) >
     

    Here are some comments around Wattenberg’s Demographics of Depopulation & Birth Dearth from above links:
    The biggest news is that in sheer numbers the human race is now likely to peak at 8.5 billion people instead of the United Nations projection of 11.5 billion. Even the U.N. demographers now agree that the population explosion will never reach the numbers they had once projected.

    The biggest reason for this dramatic decline was captured in an earlier book by Mr. Wattenberg, “The Birth Dearth.” Women are simply having fewer children and the result is that in some countries population is already starting to go down. 

    And in order to sustain the current population, the average woman would have to have 2.33 children. Falling below that average will result in a population decline. Today some 40 countries are already below the replacement rate and Mr. Wattenberg expects virtually every country to be below the replacement rate by the end of our lifetime.
     
    The unique role of the United States as the one industrial country that will keep growing. American population growth is a combination of the highest birthrate of any industrial country (2.01 children per female) and our willingness to accept immigration. Mr. Wattenberg projects that the United States will continue to grow in economic and other forms of power, while Europe and Japan decline dramatically. Indeed, in the Wattenberg vision of the future, there are only three large nations by 2050: China, India and the United States.  

    Fascinatingly, after all the focus on Chinese compulsory population control, it is not China that has had the most rapid change in birthrates among Asian countries. That honor goes to South Korea, where women now average only 1.17 children (even lower than Japan). China has dropped to 1.825 and is still declining.

    Europe is going to lose population dramatically by mid-century and therefore become significantly older. This will almost certainly entail a significant shift in power and in economic competitiveness away from an aging and shrinking European Union.

    Mexico is on the verge of dropping below the replacement rate; over the next generation this will almost certainly slow the rate of migration to the United States. Russia is facing a demographic crisis, with the shortest lifespan for males of any industrial country and a catastrophic decline in women willing to bear children.

    Mr. Wattenberg highlights the intellectual dishonesty of the Paul Ehrlich, left-wing environmentalists and their factual mistakes over the last generation. Mr. Ehrlich had predicted famines beginning in the 1970s. They simply haven’t happened. The global warming projections all assumed a population of 11.5 billion. If the human race peaks at only 8.5 billion people – 3 billion fewer than predicted – and then starts a long-term decline, how that changes all those gloom-and-doom predictions.

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