Senators raise privacy issues about federal mileage tax proposal

| 2/1/2008

Members of a U.S. Senate committee have raised the issue of privacy in response to a recommendation by a federal transportation commission to replace the federal fuel tax with a mileage-based tax.

Taxes collected on vehicle miles traveled – or VMT – would require a satellite-based technology to read how many miles a vehicle travels in a given state, members of the National Surface Transportation Policy and Revenue Study Commission said Thursday, Jan. 31, during a hearing before the Senate Environment and Public Works Committee.

Jack Schenendorf, vice chairman of the special transportation commission, told the Senate committee that the government should replace the federal fuel tax with a mileage-based tax by 2025. By then, he said, more people will be moving toward hybrid vehicles and alternative fuels.

To get to the eventual implementation of a VMT tax, commissioners are recommending an increase in federal fuel taxes of 25 cents to 40 cents per gallon from 2010 through 2015, along with other ways of raising revenue including tolls, congestion pricing and public-private partnerships for new construction.

Schenendorf said he understands that some people might question the issue of privacy during the move to a VMT-tax system. Several senators weighed in on that topic.

“Don’t waste a lot of time on that one because that ain’t gonna happen,” said Sen. James Inhofe, R-OK, the committee’s ranking Republican.

Schenendorf replied that the government would have until 2025 under the recommendation to improve the technology.

But Senate Committee Chairwoman Barbara Boxer, D-CA, had a different timeline.

“That’s thousands of years away when we’re going to track where people take their cars,” Boxer said. “I don’t think so. I think we’d better find out a better way to get to the same point.”

Boxer suggested that instead of having technology installed in every vehicle to track where it has been, a system could be devised for reporting mileage when people renew their vehicle registrations.

“There are other ways to figure out how many vehicle miles you’re using other than having some Big Brother system tracking your every move,” Boxer said.

“Vehicle miles traveled is the way to go, but there are easier ways than this convoluted deal that we need to spend money and (implement a system) by 2025.”

Aside from the privacy issue with vehicle miles traveled, Senate committee members spoke in support of the commission’s recommendations, particularly the recommendation for an increased federal investment in transportation and infrastructure.

The commission’s main objective is to have the federal government invest $225 billion per year for 50 years to fund and maintain transportation systems.

Before a VMT system could be put into place, the commission recommended, several methods of increasing revenue should be explored. Those include a federal freight fee; dedication of a portion of customs duties; a ticket tax on rail passengers; increased use of tolling; congestion pricing and private financing; and increased state and local revenues.

Commission Chairwoman Mary Peters, the current U.S. transportation secretary, was absent from the Senate hearing. She and two other commissioners disagree with the majority opinion on the commission that a temporary fuel tax increase and an eventual shift to a VMT is the best way to fund transportation.

Peters is a strong proponent of tolling and public-private partnerships. She wrote her own rebuttal to the full commission report to separate herself from the commission’s recommendations.

The commission’s recommendations are far from becoming government policy. Legislation would have to survive the House, Senate and the White House during the next re-authorization of the federal highway bill in 2009.

– By David Tanner, staff writer