States Seek to Fix Crumbling Infrastructure With Per-Mile Gas Tax

  • February 29, 2016
  • Blog

In December, President Obama signed into law the Fixing America’s Surface Transportation (FAST) Act, the first long-term federal transportation spending bill in nearly a decade. FAST allocates $305 billion through 2020 for highway and transit spending to repair and maintain the nation’s crumbling transportation infrastructure. The legislation keeps the current federal 18.4 cents per gallon gas tax, which has been in place since 1993 and become an insufficient source for infrastructure funding as Americans drive more fuel-efficient vehicles.

A drive on countless deteriorating roads and bridges around the country makes obvious the dire state of the nation’s infrastructure. Some states are taking action to increase state infrastructure funds with new taxes based on miles driven, rather than gallons of fuel purchased. A per-mile tax, proponents say, will ensure all drivers pay their fair share in maintaining transportation infrastructure – after all, a battery-powered electric vehicle has as much impact on road deterioration as a similarly-sized gasoline-powered vehicle. But given that these schemes are designed to raise overall revenue, there will be winners and losers. People who drive less fuel-efficient cars will likely pay less taxes under these programs, while those driving more fuel-efficient cars will pay more.

In a first-in-the-nation program, in July 2015 Oregon implemented its per-mile Road Usage Charge (RUC) Program. The voluntary program, which has no set end date, is administered by the Oregon Department of Transportation. It charges up to 5,000 volunteer program participants who drive cars and light-duty commercial vehicles 1.5 cents per mile travelled in lieu of the state’s per-gallon gas tax. Participants simply plug in a mileage recorder that resembles a flash drive and they receive credits for the state taxes they paid on gas. A cessation or expansion of the program is up to the Oregon Legislature.

Several states are considering similar programs, including Washington, Idaho, Colorado and California. The California Department of Transportation is currently recruiting 5,000 drivers to test ways of collecting mileage information as it determines the feasibility of shifting to a per-mile tax system. The California Road Charge Pilot Program, which was authorized by the Legislature in 2014, is scheduled to start this summer and last nine months. While gas prices have been plunging around the country, including in California, Californians are still paying higher on average than drivers in other states, and yet are still driving on a deteriorating infrastructure.

Some drivers of fuel-efficient cars have welcomed the new tax scheme because they feel a duty to pay their fair share maintaining the roads on which they drive. Would you be willing to pay more in gas taxes than you currently pay in exchange for better roads?