VMT tax smackdown: LaHood says 'maybe,' Obama says 'no'

U.S. Transportation Secretary Ray LaHood’s Thursday comment that he’s willing to consider a Vehicle Miles Traveled tax to help pay for the nation's troubled transportation system was swallowed by a pothole on Friday: His boss said no.

The allure of a VMT tax is understandable, since its goal is to create a stable source of infrastructure funding and perhaps discourage driving. It’s being considered, or at least discussed, in Idaho, Massachusetts, North Carolina, and Rhode Island. Moreover, the National Surface Transportation Infrastructure Financing Commission is expected to recommend a VMT tax in its final report, due to be released on Feb. 26.

The Commission promises a “roadmap for sweeping reform of the nation’s transportation infrastructure funding and finance framework” offering “specific recommendations for increasing investment in transportation infrastructure while at the same time moving the Federal Government away from reliance on motor fuel taxes toward more direct fees charged to transportation infrastructure users.”

A VMT tax accompanied by real transportation reform – a hard commitment to transportation investments that support energy-efficient, walkable development and transit, and not just highway strips – could make sense. But as just a new, bigger pot of money to fund the same misplaced, wasted highway expansions, it would simply be more of the same.

Then there are the questions raised by having the government track everybody’s travels. The panel’s interim report, The Path Forward: Funding and Financing Our Surface Transportation System (a 1.5 MB PDF available at the bottom of the Commission’s home page), notes experiments with GPS-based ways of tracking drivers’ mileage for taxation in Oregon and overseas in Germany and The Netherlands, and concludes: “Such programs may not be ripe for widespread implementation in the U.S. yet, but are maturing rapidly.”

Who here is willing to trust any government to use such technology for a VMT tax only?

That thought aside, the VMT tax idea met skepticism in the blogosphere, too.

Ryan Avent liked the idea “from a strict policy perspective,” though not as much as “an increase in the gas tax, combined with a broad and significant move toward congestion pricing.” Nor is he hopeful that a VMT tax is politically viable.

Matthew Yglesias offered a more blunt assessment:

A VMT tax just discouraging driving as such. Which sort of captures some of the social benefits of a gas tax and congestion charges, but pretty indirectly and inefficiently. So I’m not sold. When it comes to pricing driving-related activities, it makes sense to charge people from things that actually impose costs on others—burning gasoline, and taking up space on crowded roads—not the mere act of driving. ...
A guy who drives an SUV along a 25-mile stretch of the Beltway at peak morning rush hour is imposing a lot more negative externalities on his fellow citizens than is a guy driving a Prius 50 miles in the middle of the night on the outskirts of Albuquerque.