GBC report examines benefits, drawbacks to replacing gas tax with a mileage tax

Proposals to replace gas taxes with a tax on vehicle miles traveled (VMT), also known as road pricing, appear to be gaining traction at the federal level and in at least one western state, but are raising concerns about technology and privacy, according to a new report compiled by the Greater Baltimore Committee.

Last February, the National Surface Transportation Infrastructure Financing Commission recommended that a VMT tax system be implemented by 2020 to replace the federal gas tax, which currently is 18.4 cents per gallon. The federal gas tax could be reduced and ultimately eliminated as a VMT system is put in place, the commission recommended.

Meanwhile, Oregon lawmakers are currently considering a proposal from Governor Theodore R. Kulongoski to launch a statewide pilot program implementing a VMT tax to ultimately replace the Oregon’s 24-cent per gallon gas tax.

Road pricing proposals have been enthusiastically promoted by many in government as having advantages over traditional per-gallon gas taxes. But they have prompted concerns over privacy issues related to technology that could be used to track miles traveled by drivers. Objections often center around whether there will be public acceptance of placing a GPS device or similar technology in vehicles to enable governments to collect data on miles traveled, according to the GBC report.

The Greater Baltimore Committee report on VMT taxes is the second in a series of reports on potential options for funding transportation infrastructure in Maryland that are being reviewed by the GBC’s Transportation Financing and Governance Task Force.

The report, compiled by the GBC staff, reviews the VMT tax concept, its proposed use in the U.S., and arguments for and against its use.

A VMT mileage-based tax is one of more than a dozen concepts – many of which are used elsewhere – that the GBC’s private-sector task force is studying in order to develop recommendations for strengthening the way that Maryland funds and manages its transportation resources.

“Maryland’s current system of paying for transportation infrastructure is experiencing serious funding inadequacies,” says Donald C. Fry, GBC president and CEO. “Our state now has a more than $40 billion backlog of needed highway, transit, port, and airport projects that are planned, but not funded.”

Fry notes that Maryland’s existing gas tax of 23.5 cents per gallon, which is largest source of revenue for the state’s Transportation Trust Fund, hasn’t been changed since 1992.

The GBC’s transportation funding task force, launched in December 2008, is co-chaired by Anne Ferro, president of the Maryland Motor Truck Association, and Joseph DeMattos, Jr., president of The Health Facilities Association of Maryland.

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