Saturday, January 25, 2014

Delegates Say 'No Way' To Vehicle-Mile-Traveled Tax

A bill which would ban the creation of a vehicle-miles traveled tax has been introduced in the House of Delegates.

A Vehicle Miles Traveled (VMT) Tax,  is essentially a tax imposed on every mile you drive.  In effect such a road tax would constitute a toll on every single road, with rates set based on where and when the vehicle was driving.

A VMT was proposed as part of the Maryland  Department of Transportation's 2012 implementation report for Maryland's Climate Action Plan, which stated that MDOT wants to “establish a GHG emission-based road user fee (or VMT fee) statewide by 2020 in addition to existing motor fuel taxes."

House Bill 277 seeks to block the implementation of such a tax before it begins.  The bill states:
"The State or a local jurisdiction may not directly or indirectly including through a third-party agreement or as part of a pilot program or study, impose or levy  
    (1) a vehicle-mile traveled tax  
    (2) a mileage-based user fee  
    (3) a global-positioning-satellite tracking based toll  
or  
    (4) any other similar form of tax"
The bill further bans the state or any local jurisdiction from requiring the installation of a device in a private vehicle to facilitate the reporting of vehicle-miles traveled.

Delegate Justin Ready
The bill's main sponsor, Delegate Justin Ready (R, Carroll County), wrote the following about the bill:
I believe this is, first and foremost, a privacy issue. The government has no business learning where law-abiding citizens are driving or how often they use their cars. 
Secondly, we cannot afford more taxes in a state that already overburdens its citizens. 
I have a copy of a report published by MDOT in 2010 that calls for this program to be in place by the end of the decade. So it is very likely that without the legislation that I have put forward, MDOT will be putting it in place by 2020. Oregon has already passed this as a state law and at least two states are piloting this program, but they are looking at it in lieu of gas taxes.  In Maryland it would be added to it.
The idea that a VMT fee might be imposed in Maryland is not at all far fetched.  Maryland just raised the gas tax last year, despite substantial opposition.  The addition of new toll roads such as the ICC which are exclusively electronic payment and not cash might well be a stepping stone to a comprehensive VMT tax.

A similar bill was presented to the legislature in 2013.  The Administration opposed banning a VMT tax and sent the DOT to oppose the bill.   Martin Harris, from the Legislative office of the Maryland Department of Transportation testified why they opposed the bill annd wanted to keep the option for a VMT tax open:
"A major thing that we have with this bill however has to do with as you know there is a lot of discussion about transportation funding and where we're going to go from here.  Vehicle miles traveled is not something that the department is doing right now, it's not something we are actively pursuing, but it is one of a range of options that are being considered not only here in the state of Maryland but as has been mentioned elsewhere in the country.  This is a new and somewhat of an emerging direction and option that is being pursued and looked at for transportation funding, we think we're strongly against any sort of options being limited right now.  These are things that are new and are things that we need to consider as we go forward as we look for new and more sustainable sources of revenue.  We are against it because we need to preserve that option."



The Metropolitan Washington Council of Governments has already conducted a pilot study into the creation of a regional VMT tax , not with the goal of determining whether it is a good idea, but rather with the goal of determining the best way to sell the idea to the public.  The federal government has provided grants for such pilot studies.  The MWCOG study was based on a report from the Brookings Institute, which included the following description of one possible implementation of such a tax:
"Vehicles would be fitted with a GPS transponder device similar to an E-ZPass, perhaps as part of the registration process. If the program expanded nationally, manufacturers might even integrate transponders into new vehicles, similar to General Motors OnStar system. Insurance companies could also encourage motorists to use transponders as the companies transition to their own VMT-based risk model, as some have already begun to do. This device would record the type of vehicle, the distance traveled, and the time and location of travel. The transponder would sort the data into various toll categories"
We have written previously how the imposition of such a tax would require the widespread tracking of every vehicle on the road.  In addition, such a tax would likely be in addition to, rather than instead of, a gas tax, and the total costs are likely to be higher than gas taxes.  Just to put it in context, if a person drove on the ICC's variable rate tolls to work every day for the full length, they'd incur about $2000 in tolls every year. Now imagine what it would cost commuters if ALL roads had such tolls.  Even if the rates were set at just 10 cents per mile, the annual cost for drivers would end up being several times more than you currently pay in state gas taxes.

Should such a tax ever get introduced, rolling it back would likely be impossible after it is a done deal.  SB277 aims to make it much more difficult for the state to introduce such a tax in the first place.

The other sponsors of SB277 (who OPPOSE a VMT Tax) are:
Kathy Afzali (Frederick County)Susan McComas (Harford County)
Steven J. Arentz  (Kent, Queen Anne's, Cecil, and Caroline Counties)Tony McConkey (Anne Arundel County)
Delegate Susan L. M. Aumann (Baltimore County)Pat McDonough (Baltimore and Harford Counties)
Gail Bates (Howard County)LeRoy E. Myers, Jr. (Allegany and Washington Counties)
Don Dwyer (Anne Arundel County)Wayne Norman (Harford County)
Donald Elliott (Carroll and Frederick Counties)Anthony O'Donnell (St. Mary's and Calvert Counties)
Mark N. Fisher (Calvert County)Steven R. Schuh (Anne Arundel County)
Ron George (Anne Arundel County)Kelly Schulz (Frederick County)
Glen Glass (Harford and Cecil Counties)Michael D. Smigiel, Sr. (Kent, Queen Anne's, Cecil, and Caroline Counties)
Jay Cacobs (Kent, Queen Anne's, Cecil, and Caroline Counties)Nancy Stockdale (Carroll County)
Nicholaus R. Kipke (Anne Arundel County)Kathy Szeliga (Baltimore and Harford Counties)
Susan Krebs (Carroll County)

The bill was introduced last year, and you can see a video of last year's testimony on this bill here.  The Maryland DOT DID in fact testify in opposition to the bill, which means they DO want to impose this thing!  The DOT representative, Martin Harris, acknowledged in their testimony that they are looking at tracking vehicle miles traveled and locations for the purpose of generating revenue and that this is an option they wanted to have.

Imposing a VMT tax would be one of the worst possible things that could happen for motorists.  The goal of such a tax would be nothing short of taxing you off the road and using the profits to fund programs which don't benefit motorists.  If it is allowed to happen, the amount of revenue that could be extracted from ordinary drivers, and the amount of tracking of our day to day movements by the state, would be truly unlimited.  A VMT fee would be a "regressive tax" on low income workers who must drive to get to work. Moreover as much as many people dislike gas taxes, a VMT fee is in fact a less efficient way to collect revenue since it does not have an existing infrastructure in place to collect it and would likely involve more complicated rules, so a larger portion of the collected revenue from you would likely get wasted on implementation and paperwork costs.

The VMT fee is one of those bad ideas that will not go away, and unfortunately the public is largely unaware that this is coming.  2020 is only six years away.  The anti-car activists who support the idea would prefer the driving public never actually have the chance weigh in on it and say HELL NO!!  Waiting until after such things are implemented to voice your concerns will be too late.

Additional Information:
Text of HB277
WatchdogWire: Maryland Department of Transportation Seeks Vehicle Miles Traveled Tax
Paper: "Implementing Marginal-Cost Vehicle Mileage Fees on the Maryland 
Statewide Road Network"
LA Times: A black box in your car? Some see a source of tax revenue
CNBC: The New Way to Tax: Pay Per Mile Driven
USA Today: States explore new ways to tax motorists for road repair
AEI: Tax on mileage shatters right to privacy