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Transportation Subsidies Round-Up: Replacing the Gas Tax, Breaking Down the Arguments, and Making Transit Free

226504965_7a7e8d2ea0.jpgAs plans for rebuilding the U.S. economy continue to take shape, clashes arise daily over which money, coming from whom, will pay for what. One of the topics on everyone's mind: what will transportation look like as the 21st century progresses? This week, a few conversations in particular piqued our interest:

1. States Explore Counting Miles To Replace Gas Tax

As people drive less, and fuel standards increase -- generally great improvements -- states must prepare for declining revenues from gas taxes. Tuesday, NPR revisited an idea being tested by several states: replace the gas tax with a road-use tax, assessed on a per-mile basis (also called a VMT tax). But when the idea of switching to the VMT model on a national level by 2020 was proposed in Washington, D.C., it was bilaterally bashed. Some arguments are purely logistic: for example, the program requires all cars to be equipped with mile-counting equipment. Others wonder about the impacts of the law itself: while a gas tax encourages users to buy more fuel-efficient vehicles, a VMT tax currently doesn't differentiate. Still others just don't like the idea of the government knowing where, when and how far they drive.

"I can weigh in on it and say that it is not and will not be the policy of the Obama administration," [Presidential press secretary Robert] Gibbs said.

2. Getting rid of the gas tax: Replacing the gas tax with a mileage tax may be the best idea that everyone loves to hate

As far as ideas go, the mileage tax is not a stupid one, writes Adam Stein of TerraPass. Stein argues that replacing the gas tax with a tax based on the number of miles driven each year is possibly necessary as we shift away from the internal combustion engine. In his article, he reviews and counters many of the arguments – from technical to political -- currently being leveled against the VMT tax.

Of course, the mileage tax proposal didn’t arise in a vacuum. As cars become more fuel-efficient and high gas prices decrease fuel consumption, states have started to run out of money for roads and infrastructure. In response to the revenue crisis, states (including Massachusetts, Rhode Island, North Carolina, and Oregon) are already beginning to experiment with mileage-based systems. These local experiments should absolutely be welcomed — by progressives, conservatives and wonks alike.

3. Beyond Ravitch: Still Time for a Bolder Plan

New York mass transport takers are looking at a 25 percent fare increase and service cutbacks, if their politicians continue to twiddle their thumbs. In this piece from Streetsblog, co-creator Charles Komanoff outlines another option: the Kheel-Komanoff plan, which doubles the congestion charge and makes transit free.

Our plan rests on three powerful attributes: revenue generation, tolling equality, and sheer efficiency. We achieve these with an inclusive pricing model that asks drivers to pay a fee ranging from $2 to $10 upon entering the Central Business District with the price dependent on the time of day, and charges taxi passengers for their contribution to congestion as well.

Photo credit: flickr/elvis_payne, Creative Commons license.

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I think that it is good idea. Also it is necessary to pass corresponding laws for its acceptance.

Posted by: john on 14 Mar 09

Counting miles (or km for those of us in the metric parts of the planet ;) ) sounds like a good policy option.

One of the big problems with transport IMHO, as well as externalised costs of driving, is the fact that the major costs of driving are paid just once a year (registration & insurance & car mechanics), whereas the costs of public transport are usually amortized into every time you use it. This creates a psychological incentive to drive, because you forget about those high one-off costs of driving, or else "want to get your money's worth" for them.

In my mind, if we introduce mileage taxes, the one-off costs of registration & insurance should be dramatically reduced, and folded into this mileage tax, which should be paid say weekly, or at least monthly. This would change the incentives to use your car as frugally as possible, and create a more level playing field with public transport. In combination with congestion charges it could work well I think.

Posted by: Patrick Sunter on 15 Mar 09

Being an urban/transportation planner the discussions of transportation network funding are very important. There needs to be a stable source of funding for public transportation that is NOT sales tax/fuel tax based. The biggest challenge our transit operators are facing right now is that a majority of the funds available are for only restricted uses like bus purchases, rail projects and that almost none of it is for OPERATIONS that happens to be the most costly part of running any transport system be it public transit, streets & roads, or pedestrian or bicycle facilities. There need to be minimum amounts of funding guaranteed per year or the US will never have the type of reliable and viable public transport system it needs to be 'bright green'. I'm all for a mileage tax too, congestion charge and maintaining and raising fuel taxes, but this is coming from someone who drives at most 5,000 miles per year and lives in the CBD (two people and one car AND a lot of bicycles, oh and our two feet :)).

Posted by: Barbara on 18 Mar 09

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