Mileage and weight based road taxes.

[Chuckanut]

My state of Washington is going to try out a voluntary mileage based road tax system in a few years. There are a lot of issues regarding things like privacy, out of state travel, the amount of the tax, etc that are still unsettled. I'll start with this article on the WA proposal.

Note: The increased use of EVs on our roads has brought the issue of how to pay for road building and maintenance to the forefront. Since it's not only an EV issue I suggest this separate topic assuming the MODs have no objections.



https://www.king5.com/article/news/...stem/281-ee1ce24f-5ea4-4785-86c5-c87a3a267769

OLYMPIA, Wash. — A House proposal that would transition Washington state's gas tax held a public hearing on Tuesday in Olympia.

House Bill 1832 would establish a voluntary road usage charge program, which places a 2.5-cent per mile fee on motor vehicle usage of public roadways in the state.

Under the bill, drivers could voluntarily participate starting July 1, 2025.

Electric car owners who participate would not have to pay fees associated with electric vehicles, fees that can reach $275 a year.

Participants would receive tax credits for gas taxes paid throughout the year.

The system would become mandatory for all drivers on Jan. 1, 2030.

"It’s unpopular, frankly on both sides of the aisle," said Sen. John Braun, R-Lewis County. "It’s the wrong answer to a real problem.”

Braun said he supports using sales taxes generated from the sale of cars to pay for roads instead of charging drivers by the mile.

Rep. Jake Fey, D-Tacoma, said he knows there are "strong" opinions about how the state should pay for roads.

From the WA State Association of Counties

https://wsac.org/road-usage-charge-hb-1832/

Background
A Road Usage Charge (RUC) is a per-mile charge drivers would pay for the use of the roads, as opposed to paying a tax per gallon of gas.
For years, vehicle fuel economy has been improving, and electric vehicles are becoming more common. While this is great news for the reduction of harmful emissions and air pollution, these advances have also created an unsustainable trajectory for funding our transportation system. Much of the revenue our transportation system depends on is generated by the gas tax. Higher vehicle fuel efficiency and vehicles that do not rely on gas results in decreased tax collection and diminishes our ability to keep transportation infrastructure in good repair. Taxing fuel is no longer a reliable, equitable source of funding and we need to find a better alternative for the long term.
Recognizing this revenue challenge, in 2012 the Legislature directed the Transportation Commission (Commission), in close cooperation with the Department of Transportation and with guidance from a multi-stakeholder steering committee, to conduct an assessment of a RUC and determine its feasibility. In their 2020 final report, the Commission determined that a RUC is not only feasible but would out-produce the gas tax in terms of revenue as cars become more fuel efficient. The final report also provided information on the legal, fiscal, operational, and policy implications of a RUC and offered recommendations on how it could be implemented in Washington.

 

[Qs Laptop]

In theory, a mileage use tax makes sense to me. I Googled WA state's gas tax and it is $0.494 per gallon. Assuming an "average" gas powered vehicle drives 12,000 miles per year and gets 25 mpg, that would be 480 gallons used in a year, so $237.12 annually. A vehicle that gets 30 mpg currently pays $197.60.

The proposed mileage rate is $0.025 per mile. That same 12,000 miles per year would cost $300 annually. This is a tax increase. You would need to have a vehicle that gets 19.76 mpg under the current gas tax scheme to pay $300 in gas taxes annually.

The problem is how does the state collect the odometer readings? Better yet, should the state collect odometer readings? I don't see how the program can be implemented without doing so. The proposed law says vehicle owners would have the option to submit periodic odometer readings and there are also automatic methods of reporting mileage, should the owner elect to use this method. I'm guessing the automatic method is an electronic device that would be placed in the vehicle's electronics somewhere.

Do we really want to be compelled to tell the government how many miles we drive per year? Should citizens be burdened with more recordkeeping? There is a provision in the current legislation that would exempt out of state mileage from counting toward the mileage tax. That means the vehicle owner would need to keep track of in state and out of state mileage, if they wanted to fully comply with the law. Is that something people want to hassle with?

 

[Zathras]

...
The problem is how does the state collect the odometer readings? Better yet, should the state collect odometer readings? I don't see how the program can be implemented without doing so. The proposed law says vehicle owners would have the option to submit periodic odometer readings and there are also automatic methods of reporting mileage, should the owner elect to use this method. I'm guessing the automatic method is an electronic device that would be placed in the vehicle's electronics somewhere.

Do we really want to be compelled to tell the government how many miles we drive per year? ...

We already tell the 'government' how much we have driven when we sell the car. We also tell our insurance company general categories of annual milage.

The toughest part of this will be out of state miles. If every state had the some amount of miles residents drove out of state as visitors from out of state driving in state, it would all even out. While that may be the case for some states, I am sure it isn't for all.

The big question is, just how 'perfect' does it need to be?
Annual self reporting when license tabs are renewed would be simplest.
This would also be a very low cost to the government and thus the residents.

You could make it more reliable, but is the extra cost worth it?
I mean, it is great if you can stamp out $50 of fraud, but what if doing so costs $100?

 

[savory]

Most of my knowledge is based on my bicycle infrastructure advocating. By far not an expert but things I would include in a vehicle tax discussion would be:

- Federal tax has not been increased since 1993. However grants are won by cities and states for local projects. Everyone is paying for XYZ project
- Gas taxes in cities and states require property tax revenue for road projects since the gas taxes do not cover local project costs. This is the key point made by bicycle advocacy groups since they typically pay some level of property tax they remind motorists that they do pay for roads and cause much less wear & tear.
- Significant local projects will be done with State grants. Often supplemented with federal money which I believe may not be raised from vehicle related taxes.

While it is all tax money going to pay for roads, one needs to take a big step back to determine where the money came from and how it is being distributed. It feels to me that the whole system, not just state gas tax, needs to be evaluated based on our recent experiences and expectations. Isolating E-vehicles makes some sense but it still should be discussed as part of the actual costs to maintain infrastructure.

 

[Midpack]

- Federal tax has not been increased since 1993. However grants are won by cities and states for local projects. Everyone is paying for XYZ project.

How to fairly charge EVs needs to be addressed, however the above is the overriding issue. Ridiculous.

While a fair discussion, EVs are a very small part of the problem of underfunding highway construction and maintenance - an issue decades in the making.

Many Americans believe that drivers pay the full cost of the roads they use through gas taxes and other user fees. That has never been true, and it is less true now than at any other point in modern times. In the 1960s and early 1970s, gas taxes and other fees on drivers covered more than 70% of the costs of highway construction and maintenance. The share of transportation costs covered by gasoline taxes is likely to continue to decline as a result of inflation (gas taxes are not indexed for inflation), more fuel-efficient cars, EVs, and slower growth in driving.

Although it varies dramatically among the states, in the US gas taxes only fund about one-third of the cost of construction and maintenance of state & local roads.

34% - Gas taxes
21% - License & registration fees
15% - Tolls
30% - Additional funds from state general funds - e.g. income & sales taxes.

Only 4 states raise enough revenue through gas taxes, license fees and tolls to cover their highway spending (CA, IN, TN, MT). AL and ND only cover 17% and 29% respectively.

https://taxfoundation.org/state-infr...ture-spending/

 

[Chuckanut]

In theory, a mileage use tax makes sense to me. I Googled WA state's gas tax and it is $0.494 per gallon. Assuming an "average" gas powered vehicle drives 12,000 miles per year and gets 25 mpg, that would be 480 gallons used in a year, so $237.12 annually. A vehicle that gets 30 mpg currently pays $197.60.

In reality the gas tax is higher. The official gas tax as defined by the legislature does not include the new carbon tax in WA state. (Don’t get me started on that.). Estimates are that the carbon tax is costing another 25 to 40 cents a gallon. Current average cost for a gallon of regular gas is $4.65 in WA state. One of the highest in the nation. Compare that with Oregon - $4.39. And Idaho - $4.09.

Back on topic, the current gas tax in WA state is constitutionally limited to roads. There is no such limitation on the proposed mileage tax. Make of that what you will.

 

[MC Rider]

If it goes by weight, my 400 and some pound motorcycle should cost almost nothing.
At least compared to 18 wheelers.

I'd be OK with that.
Well shipping might cost more. Hmmm........

 

[The Cosmic Avenger]

A use tax for roads is appealing, as on the surface it sounds fair. But in some ways it's actually a regressive tax, as it would hit harder those with lower incomes who still need to drive to work or care for loved ones or receive medical care. A use tax would also somewhat counteract the higher minimum wage in high COL areas, since generally higher-paying jobs are in very high rent/RE areas, and those making (admittedly higher) minimum wage working there often can't afford to live near where they work, and so must commute farther. I wouldn't mind seeing a use tax for commercial use of roads, which probably have a higher impact (trucking, etc) on the roads anyway. But local and state taxes should already pay for the maintenance of roads and highways; it might be better to increase the property tax, as owners and leasers, commercial and residential, all benefit from the roads, regardless of how much they actually drive.

 

[CaptTom]

Thanks, Cosmic, for saying what was in my mind reading all the other posts in this thread.

Let me be clear: Gas taxes are stupid. Road taxes are stupid. Tolls are stupid.

The entire economy uses, and depends on, good transportation infrastructure. We all need to pay our share of the costs for this infrastructure.

This brings us back to the same question we have about any government spending: What is the most "fair" way to impose taxes. Some would have a fully progressive system, where those who can afford more pay more. Some would have a "flat" system where we all pay the same amount. We end up with a blend of all different flavors of taxes, fees and costs.

It's the politician's job to calculate my fair share, based on the will of their constituents. Ignoring all the flaws and corruption, let's assume that's been done.

I say just bill me for the total amount. Don't nickle-and-dime me at toll booth, the DMV, the gas pump and all the thousands of other ways the government reaches into my pocket. This alone will eliminate layers of entrenched bureaucracy and save a lot of money.

Send me the bill once a year.

The day before election day.

Problem solved.

 

[Chuckanut]

Here's a recent article on what Michigan is looking at and how some people are responding:

https://www.wsj.com/articles/gretch...-surveillance-22381824?mod=trending_now_opn_2

A few quotes to help for those on the wrong side of the pay wall.

Michigan’s new state budget, which Democratic Gov. Gretchen Whitmer signed on July 31, authorizes spending $5 million on a survey to gauge consumer attitudes about the concept. The answer officials receive probably will depend on the wording of the question. If they want to avoid a libertarian freak-out, they should try something other than “Do you want Big Brother in your passenger seat?” Debate over the proposal will test the public’s tolerance of surveillance technology—and foreshadow an even more contentious dispute over the freedom to drive.

To solve this problem, more than a dozen states are experimenting with how to introduce taxes based on VMTs, or vehicle-miles traveled. By harnessing GPS data, officials can count miles with the accuracy of odometers, and they can distinguish between travel on interstate highways, county roads, private land and across state lines. A tax on VMTs might feel a lot like a user fee.

States could allay privacy concerns by mandating erasure of driving records after a period of time or demanding warrants for law-enforcement access. Yet calls to exploit driver data will be hard to resist. Police will say they need the data to catch criminals. Insurance companies will seek the data to help set rates. Public-health officials will insist on access to enforce future lockdown orders. Ideologues will want to know who parked near the wrong political rallies. Each concession will deliver a ding to personal liberty.

 

[Midpack]

Whatever they choose, there will be fierce opposition by some faction…

 

[VanWinkle]

Thanks, Cosmic, for saying what was in my mind reading all the other posts in this thread.

Let me be clear: Gas taxes are stupid. Road taxes are stupid. Tolls are stupid.

The entire economy uses, and depends on, good transportation infrastructure. We all need to pay our share of the costs for this infrastructure.

This brings us back to the same question we have about any government spending: What is the most "fair" way to impose taxes. Some would have a fully progressive system, where those who can afford more pay more. Some would have a "flat" system where we all pay the same amount. We end up with a blend of all different flavors of taxes, fees and costs.

It's the politician's job to calculate my fair share, based on the will of their constituents. Ignoring all the flaws and corruption, let's assume that's been done.

I say just bill me for the total amount. Don't nickle-and-dime me at toll booth, the DMV, the gas pump and all the thousands of other ways the government reaches into my pocket. This alone will eliminate layers of entrenched bureaucracy and save a lot of money.

Send me the bill once a year.

The day before election day.

Problem solved.

Perfectly said CaptTom!!!
They won't do it as we would actually know how deep into our pockets they are digging for their pensions and bloated bureaucracy.

VW