BOSTON (State House News Service) - It’s unclear how a vehicle miles traveled fee would possibly be levied on Massachusetts drivers but the past experiences of other states show what hurdles might arise if state officials try to enact the new fee her.
The vehicle miles traveled fee has the advantage of taxing drivers for how much wear and tear they put on the road, regardless of their fuel economy. The fee was included as a possible major MBTA funding source in a Patrick administration grant application to the Federal Transit Administration. While its chances of passing the Legislature are questionable at best, the plan says it would not go into effect until fiscal year 2017, at the earliest.
The three-paragraph proposal contained in a MassDOT submission for New Starts program funding is about the extent of the proposal, so far, according to Transportation Secretary Richard Davey.
“That’s as far as we have taken the idea,” Davey told the News Service on Wednesday. Later he said it’s unclear how a more detailed plan could come together but also said, “It’s obvious that we need to move from hypothetical to reality in the next several months.”
Earlier this month, Gov. Deval Patrick told reporters, “You got to wait for my plan. We’re thinking through what our options are.”
If the fee was enacted as planned in the New Starts application, the expected $555 million in revenue would almost double the amount of taxes and fees motorists currently pay to the state through gas taxes. In fiscal year 2011, the state collected $660.7 million in total motor vehicle and gas taxes.
Oregon officials have been trying to pass a vehicle miles traveled tax since about 2002, and if they succeed they would be the first state in the country to pass such a law, James Whitty, manager of the Office of Innovative Partnerships in the Oregon Department of Transportation, told the News Service.
“There are a lot of states that are investigating approaches to taxing by the mile,” Whitty said in a phone interview. “We’re the farthest along.”
Still, those in favor of the new tax in Oregon have yet to succeed in passing it through the legislature, Whitty said. In Oregon and other states, the tax is intended to bring equity to road taxes paid by both gas guzzlers and electric cars and it would only be levied on electric cars.
In Massachusetts, it is apparently aimed at all drivers. The revenue from a 0.85-cent vehicle miles traveled tax in is estimated to be $555 million in fiscal 2017. In the last year, Massachusetts vehicles traveled a total of 54.8 billion miles from March 2011 to March 2012, according to the Federal Highway Administration. That means that if the tax proposed for fiscal 2017 was based on the recent in-state mileage of all cars it would generate about $465.9 million a year, which is still almost $90 million short of the projected revenue. To reach the $555 million in anticipated revenue at the 0.85-cent-per-mile rate, the number of miles traveled within Massachusetts would have to rise by about 10.5 billion, to 65.3 billion, over the next five years.
The state has 5.9 million registered motor vehicles, according to MassDOT’s 2010 annual report. If the tax is only levied on 5.9 million motor vehicles, it would work out to an average annual payment of $94 per vehicle to get to the $555 million. Car owners already pay a number of other fees beyond the gas tax, including a $50 registration fee, a $29 inspection fee, and excise taxes, which go to the city or town where the car is registered. The state’s gas tax plus fees is 23.5 cents per gallon, which puts it midway between Alaska’s lowest rate of 8 cents per gallon, and New York’s highest rate of 51.2 cents per gallon, according to American Petroleum Institute data.
According to an overview of VMT studies by Nevada’s transportation department, studies into VMT taxes have been undertaken in 16 states. In addition to Oregon and Nevada, the list includes California, Idaho, Montana, New Mexico, Texas, Kansas, Minnesota, Iowa, Illinois, Florida, South Carolina, and Maryland. Maine is the only New England state listed in Nevada’s survey of states studying VMT.
Trucks in Oregon already pay a vehicle-miles-traveled fee but that is based on self-reported data, Whitty said. The systems tested in Oregon and other studies, however, use technology including real-time monitoring of odometers and GPS tracking.
Whitty told the News Service that an across-the-board GPS monitoring system was unpalatable to the public because of privacy concerns.
“That just doesn’t fly,” Whitty said, going on to explain, “People just objected. Even people who use GPS every day; those people objected.”
The latest proposal included various monitoring methods, including by smartphone, and each driver could select which method. Alternatively, drivers could pay a flat fee for unlimited driving, Whitty said. The government would not handle the technological aspects of billing per-mile under the Oregon proposal,
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