University of Iowa to study mileage-based tax system

| 11/17/2008

Highway users may one day pay taxes by the mile instead of by the gallon. Critics are worried that the preferred data collection method of the proponents – most likely GPS technology – has the potential to violate personal privacy.

In October, the federal government awarded a $16.5-million grant to the University of Iowa to conduct a study in six regions – San Diego, CA; Austin, TX; Baltimore, MD; Research Triangle in North Carolina including Durham, Raleigh, and Chapel Hill; Boise, ID; and the Iowa counties of Delaware, Dubuque, Linn, Jones, Jackson, Cedar, Clinton, Muscatine and Scott.

Paid study participants will have global positioning systems installed in their vehicles to record miles traveled, according to University of Iowa officials.

Participants will not pay fuel taxes at the pump but will upload their GPS data to a central computer system and be billed according to their mileage traveled. Tax revenue will then be distributed to regions where the participants traveled.

Driving the study is the notion that the federal Highway Trust Fund that pays for transportation infrastructure receives most of its revenue from per-gallon taxes on gasoline and diesel fuel.

“Over the past 10 years, the motor fuel tax has increasingly failed to generate sufficient funds to repair damaged roads and bridges, fill potholes, and maintain the safe and efficient operation of our highway system,” University of Iowa officials stated online. Click here to read more about the study.

Highway user groups and lawmakers have raised privacy concerns about any system that tracks locations and movement of vehicles.

Sen. Barbara Boxer, D-CA, chair of the Senate Environment and Public Works Committee, stated in January that the privacy issue could be the deal breaker for a mileage-based tax.

“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 told members of the National Surface Transportation Policy and Revenue Study Commission on Jan. 31.

Click here to read a report of the hearing by Land Line, which includes the commission’s recommendation that the federal government raise fuel taxes significantly in the short term but phase them out by 2025 in favor of a mileage tax.

University of Iowa officials addressed the issue of privacy in study materials.

“It is likely that acceptability of the new approach will depend to a large extent on perceptions regarding privacy,” officials said, acknowledging that it would be possible that records could be “subpoenaed in criminal or civil cases involving the owner of a vehicle.”

“Because the trade-off between privacy protection and audit-ability is one of the key issues we are addressing in this national evaluation study, we will enable participants to experience each method during the course of the field-testing.”

– By David Tanner, staff writer