Raise The Gas Tax AND Switch To VMT Fee, Says Commission

The National Surface Transportation Infrastructure Financing Commission advises Congress that the U.S. is in an infrastructure crisis, and that they must raise the gas excise tax by ten cents now and begin the switch to a VMT fee.

"A commission established by Congress to study options for financing the nation's roads and bridges recommended on Thursday raising the federal gas tax by 10 cents a gallon.

The National Surface Transportation Infrastructure Financing Commission cited a "crisis" of neglect for infrastructure, and also called for an eventual switch to a tax based on miles driven, rather than gasoline consumed.

Raising the federal gas tax, now 18.4 cents a gallon, is so politically tricky that the idea has gone nowhere in 16 years.

The report also called for raising the federal diesel tax, now 24.4 cents a gallon, by 15 cents."

From WSJ:Obama Urged to Raise Gas Taxes to Save Roads
"In a report issued (Feb. 26), the National Surface Transportation Infrastructure Financing Commission said that raising gasoline taxes and taxing miles driven instead of gallons are the only viable ways to get the tattered U.S. road and transit system back on track. The Obama administration just shot down both proposals.

The recommendation was two years in the making-the commission's mix of transport industry veterans, elected officials and think-tankers has been trying to divine how to raise the extra money needed to maintain and improve roads, buses, and trains."

Thanks to Gladwyn d'Souza

Full Story: Panel Suggests Higher Gas Tax

Comments

Comments

No Pain No Gain

We need to tax gasoline more not only because the current gas tax doesn't cover the full cost of maintaining our roads, but also, and more importantly, because of the climate crisis.

The clock is ticking on getting our greenhouse gas emissions under control and we're pathetically unprepared. Our emissions go up every year with no end in sight. For us to make an effective transition to the plug-in hybrids and electric cars that can actually run on clean-renewable energy we have to make gasoline more expensive and use the money to subsidize the clean technologies.

The world is starting to realize how serious this issue is, but we're in a race against time and we haven't even put our shoes on yet.

Basic economics: when the price of a good goes up, quantity demanded goes down. We have to put ourselves through this if we expect to have a livable future as a species.

Toll-Everywhere Congestion Pricing

The eventual shift to plug-in hybrids (which will pay virtually no gas tax) and the shift to a VMT fee give us an opportunity to dramatically reduce congestion by adopting toll-everywhere congestion pricing.

This would adopted as part of the shift to a VMT fee. Fees would vary depending on how congested roads are, and fees would be set high enough to ease congestion.

Beyond the time saved by reducing congestion, the greatest advantage of toll-everywhere congestion pricing would be to eliminate the pressure to expand freeways. It would change the situation that politicians face.

Currently, suburban politicians have constituents stuck in traffic on congested freeways. If they oppose freeway expansion, it means that they are willing to let their constituents continue to suffer in congestion. Obviously most politicians will not do this.

With congestion pricing, the decision will not be whether to leave people stuck in traffic. Instead, the decision will be whether to expand freeways so you can lower the price of driving on them and generate more sprawl. In this situation, many politicians would be willing to oppose freeway expansion.

Toll-everywhere congestion pricing would require GPS-based systems to track cars' movements, and objections to this based on privacy concerns are currently the biggest obstacle to implementing it.

Of course, there should be laws to protect this data from being released, and even to destroy this data after the billing is complete. With those protections, GPS tracking cars' movements would be less of an invasion of privacy than your credit card company tracking your retail purchases.

I think the concerns about privacy are overblown, and the benefits of reducing congestion would be immense.

Charles Siegel

VMT Fee

Won't a VMT fee just provide a convenient source of funds to build more freeways? Ideally the money would be used in a more responsible way, but we all know we are not living in an ideal world.

Of course the same can be said of gas tax revenue, if it is high enough unless and until we switch away from gasoline (but then we can just tax electricity to pay for roads).

I wouldn't downplay the privacy issue. In an age of eroding civil liberties I understand peoples' reluctance to have some public official know where they are all the time. Privacy laws, including the 4th amendment, are easily broken in this country.

I guess there's just no substitute for the will to live another way. Planners will be hard pressed to accomplish anything significant if they can't help to instill this will into the general public.

Flexible Funding

Before we get to the VMT fee, we will have to reauthorize federal TEA funding in September. That is the time to try to make all federal transportation funding flexible, so it can go to transit as well as to freeways. Funding should be flexible regardless of whether we have a gas tax or a vmt fee. We do need lots of funding to build transit, to maintain existing roads, and I would also say to demolish some existing freeways and replace them with boulevards.

I don't think there is any way to tax electricity to pay for roads. You would be taxing everyone who uses electricity, even those who don't use the roads - which would be a huge subsidy to road use.

I wouldn't downplay the privacy issue either; we definitely need strong protections for the privacy of that data. But I also wouldn't downplay the issue of global warming - and I think congestion pricing is an essential part of attempts to reduce the automobile's contribution to global warming.

There is no substitute for the will to live another way, as you say, but people who are stuck in traffic during their daily commutes are going to fight for more lanes for themselves - making it much more difficult to change the way we live.

PS: When you say:
"Won't a VMT fee just provide a convenient source of funds to build more freeways?"
aren't you contradicting this statement you made earlier:
"We need to tax gasoline more ... because of the climate crisis."
Taxing gasoline more also would provide a convenient source of funds to build more freeways.
In fact, I think we both agree that we need to charge more to road users and spend the money we raise on better public transportation.

Charles Siegel

Hmmm

I do worry that higher gas taxes could be used for road building. However, the critical difference between gas taxes and VMT fees is that gasoline taxes only apply to the polluting fuel we use to drive whereas VMT fees apply to driving per se. I'm much less concerned with driving per se than I am with the fact that it's powered unsustainably.

For compact, mixed-use development to be successful we have to allow people to bring their cars with them into the city. Thankfully, they almost certainly won't use them as much when the things they go to are closer (even if they still go to them by car).

That said, we need to put cars in their place. We need to encourage people paying for their own parking, mandate the arrangement of parking in land efficient ways (like parking garages), and make sure that the alternatives to solo driving are strong.

The hard part is actually doing it :)

Congestion Pricing

"For compact, mixed-use development to be successful we have to allow people to bring their cars with them into the city."

So, were you against New York's proposal for congestion pricing? Are you against London's congestion pricing?

These sort of CBD congestion pricing is directly related to your concern, since it makes it more expensive for people to bring their cars into the city (while it uses the money it raises to provides more convenient transit into the city).

The sort of toll-everywhere congestion pricing I am talking about is not as directly related to your concern, since it applies on congested suburban freeways as well as in the city. For example, one of the most congested freeways in the SF Bay Area is I-580, filled with people who live in sprawl development in the the central valley and commute into more central parts of the Bay Area. This freeway is actually more backed up than the freeways in San Francisco proper, so it would have a higher congestion price - making it more expensive for people to live in sprawl.

The congressional district this freeway goes through has an environmentalist congressman, but in contrast to his other environmental positions, he supports widening this freeway. He knows that he cannot oppose the freeway widening without offending constituents who are stuck in traffic every day.

So, toll-everywhere congestion pricing would discourage new sprawl development in the central valley, and by reducing congestion on this freeway, it would reduce the political pressure to widen the freeway.

"I'm much less concerned with driving per se than I am with the fact that it's powered unsustainably."

Will you stop opposing sprawl when we have plug-in hybrids? Plug-in hybrids will pay virtually no gasoline tax, and the energy used to power them will cost less than one-half as much per mile as gasoline (largely because electricity costs are controlled and are less than market price).

With plug-in hybrids, VMT will increase dramatically because of the lower cost per mile. And there will be virtually no gas-tax funding for transportation. The only way to deal with both of those facts is a VMT fee.

It is inevitable that people will shift to plug-in hybrids when gas prices go up (because of limited global oil supply and because of carbon pricing). Your idea that we should have a higher gas tax but not have a VMT fee will just speed up that shift, leaving the roads as congested and the cities as sprawling as ever.

Charles Siegel

. . .

Sprawl is much less of a concern once the air pollution associated with driving is dealt with. Half of the environmental argument against it evaporates with that. It still consumes lots of habitat and agricultural land and costs more for infrastructure, but at least it won't be causing climate change or smog. This is important because PEOPLE LIKE SUBURBIA and the world is suburbanizing fast.

As far as congestion pricing goes, I'm open to it, provided that the money is used well. The only catch is, it's so hard to use the money well. Odds are it will go for new roads. As I said before, this is a danger with gas taxes too, but the gas tax focuses on the polluting fuel, not driving in general.

When I say we have to let people bring their cars with them into the city I'm mainly referring to building apartment buildings that have some parking in them. So, more like LA, less like Manhattan.

How do you propose to get a nation that mainly gets around by car to voluntarily tax itself based on miles driven? (Granted, getting them to accept higher gas taxes is tough too.)

And, by the way, how do you define sprawl? All suburbia? At what densities do you think people should live? And who should decide in the end?

"Sprawl is much less of a

"Sprawl is much less of a concern once the air pollution associated with driving is dealt with. Half of the environmental argument against it evaporates with that."

That is an unbelievably short-sighted comment. You are going to see and feel the effects of disappearing natural/agricultural lands long before you feel the effects of climate change. In addition, the air pollution could be just as bad (just somewhere else) when we start producing enough electricity to power ALL those cars - there is no way renewable energy could fulfill that demand by that point, we're a long way from that). The ecosystem services (see E.O. Wilson's "The Future of Life") provided by natural areas are free - when they're gone, it will cost $300Trillion ANNUALLY to replace them. Your food is as inexpensive as it is because it is grown fairly near to you, and it used to be grown even nearer. The more ag. land disappears, the less food there will be or the further it has to travel, causing very serious immediate effects.

So, should we continue sprawling after hybrids become affordable simply because we won't be burning gasoline anymore? Is the other "half of the environmental argument" worth ignoring because "at least it won't be causing climate change or smog?" (which also isn't true, see my comment above)

I don't know why we're arguing over which one we should use - the VMT fee or the gas tax? Obviously, it's both.

Voluntarily Taxing Itself

"How do you propose to get a nation that mainly gets around by car to voluntarily tax itself based on miles driven?"

Once the cleaner cars that you want become common, there will no longer be funding for transportation from the gas tax. At that point, a VMT tax is the most likely method of raising funding for transportation. There is no reason that a VMT tax should be harder to pass than a gas tax.

My point in this thread has just been that the VMT tax should include congestion pricing. Then rather than just being a substitute source of revenue, it would have the immense added benefit of reducing congestion and of shifting people in congested areas to public transportation.

Charles Siegel

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