Editorial: Obama Should Assist States in Implementing VMT Fees

The main reason the VMT fee is being promoted in most circles is because the gas tax, currently 18.4-cents per gallon, by not being raised regularly (last time was in 1993 by 4.3 cents) or indexed for inflation, has shown itself to be an unsustainable form of transportation revenue. Noel Popwell, "a freelance writer and a revenue analyst with New Jersey state government", argues that aside from being sustainable revenue generator, the fee should be considered for five reasons:

1. Gas taxes lack fairness: As The New York Times Sunday Review Opinion observed on August 12, "Fully electric cars are still a niche product bought mostly by affluent drivers" (who pay no road taxes). In January, Streetsblog's Tanya Snyder reported on the U.S. General Accountability Office finding in December, 2012 that a "Mileage Fee Could Be More 'Equitable and Efficient' Than Gas Tax".
2. Congestion mitigation: A variable, as opposed to flat, per-mile fee, increasing with the level of congestion, would provide a financial incentive to travel off-peak. Similarly, less congested roads could charge a lower fee
3. Pro-environment: The fee itself has the potential to reduce driving and encourage use of alternatives. For short trips, the bicycle becomes more attractive, financially speaking.
4. Allows modern technology to replace "a complex shifting of the costs of the tax along the gasoline supply chain, from refiners and wholesalers to retailers and consumers."
5. The pricing technology spurs economic investment and job creation in order "to develop and install on-board devices on new vehicles, deploy the required supporting infrastructure, and set up collections and enforcement systems."

Popwell writes that the GAO found that all states "reported strong support for federal action to move toward this new financing method. And more than half cited the administrative costs of implementing the system as a serious barrier to moving ahead."

Popwell doesn't ask President Obama to support VMT fees per se, rather, he wants the administration to drop "its opposition to the concept and provid(e) the resources needed to fund ongoing state pilot programs, and start new ones". 

On a related note, Ore. Gov. John Kitzhaber signed SB 810 on August 14, creating the nation's first VMT fee. However, it it is only available for up to 5,000 motorists who will pay a VMT fee of 1.5-cents for every mile they drive instead of the 30-cent state fuel excise tax.

New Jersey, the state where Popwell works as a revenue analyst, considered legislation to implement a VMT fee this year. Instead, the legislature opted to charge an additional $50 flat registration fee for EVs - regardless of the amount of miles the vehicle is driven. How smart is that?