Nine Lives of VMT Fees

A 150-page US study, “Implementable Strategies for Shifting to Direct Usage-Based Charges for Transportation Funding”, commissioned by AASHTO through the National Cooperative Highway Research Program was released early in September 2009. The NCHRP study, conducted by the RAND Corporation with the University of Minnesota answered the question: “How can the US deploy VMT fees by 2015?”

Only 20 months prior, the National Surface Transportation Policy and Revenue Study Commission published a two-year, 258-page report that called for a fuel-tax increase and indicated that we eventually need to start thinking about VMT charges as a user-fee in lieu of fuel taxes. VMT fees were so remote for this Commission that the then Secretary of Transportation and Commission co-Chair, Mary Peters – who appreciated that they could not be forestalled much longer – wrote a dissenting view with two other of the 12 commissioners that stated that the gas-tax was unsustainable and that VMT fees need to be looked at more critically.

In February 2009 – 13 months later – a second US congressional body, the National Surface Transportation Infrastructure Financing Commission, published another 2-year, 235-page report. This one was more assertive about the VMT fee idea, essentially agreeing with Peters’ earlier dissenting view. In little more than a year, the US thinking went from “Raise the gas-tax now and consider VMT charging someday” to “Start thinking about VMT fees in time for 2018, and raise the gas-tax as an interim measure.”

The message contained in the NCHRP report from last month was alarming by comparison: “Here are nine ways to implement the VMT charge by 2015”. By comparison, a fuel-tax increase was treated as ‘nice-to-have’.

Buried on page 120 is the single, clearest evidence of political mischief I have seen regarding fuel taxes and road user charging: “If there is a major need for short-term revenue, it is not clear how implementing a poorly thought-out VMT fee is superior to raising the gas tax. There is a lot of room to raise the gas tax without affecting behavior… However, Congress seems very focused on what they can do besides raise the gas tax, such as implement a flat VMT fee based on average mileage.”

That statement, which I was greatly relieved to read, should be highlighted in your copy. I hope it gives enough pause to policy makers to recognize that the single greatest mistake the US can make now is to kludge its way out of a congested, under-funded, oil-dependent, gas-tax-broken, surface transportation mess with a pure VMT charge and assume it can be retrofitted for congestion management later. The United States would be better served by an effective time-distance-place (+vehicle-type) charge scaled to address the funding requirement.