What Will Replace Gas Taxes?

More states are implementing policies aimed at replacing lost revenue from gas taxes, which are bringing in less money as more electric vehicles hit the road and have “traditionally been a critical source of funding for transportation infrastructure,” according to an article by Jared Brey in Governing.

Brey notes that “A national pilot program to collect VMT fees in place of gas taxes is expected in the next few years.” Meanwhile, over half of U.S. states have some kind of fee for electric vehicles to offset the lost revenue, but a recent report from the MIT Mobility Initiative reveals that “most aren’t high enough to replace the revenue the average driver pays in state gas taxes each year.”

“The need to replace the gas tax is also a chance to build a ‘more rational transportation funding system,’ the report says — one that accounts for all the ways that cars wear on infrastructure and the environment, whether they’re electric or gas-powered.” In 2006, Oregon launched the nation’s first voluntary VMT-based fee program, which “allows drivers to opt in and pay a 1.8-cents-per-mile fee and get a credit against gas taxes paid.”

At the federal level, the Department of Transportation is tasked by the Infrastructure Investment and Jobs Act with developing a pilot program to “test the design, acceptance, implementation and financial sustainability” of VMT fees, but Garett Shrode, a policy analyst at the Eno Center for Transportation, says the department is “dragging its feet” and “should focus on simplicity, and on finding ways for federal and state VMT programs to overlap.”