House Dem’s bill requires Treasury to study taxing cars by the mile

Rep. Earl Blumenauer (D-Ore.) on Thursday introduced a bill that would require the Treasury Department to study the viability of raising new federal highway funds by taxing cars for each mile they drive.

Blumenauer’s bill, H.R. 6662, is a response to dwindling highway funds, which he and other Democrats have said threatens to delay much-needed federal highway projects, and also threatens the creation of infrastructure jobs. Pressure has been building for the last few years to find alternative ways of raising highway funds, as revenues from gasoline taxes have not kept up with demand for new spending.

“We must invest now in our nation’s roads, bridges and public transit to prevent enormous costs in the future,” Blumenauer said Thursday. “With the Highway Trust Fund facing a 21 percent reduction revenue by 2040, based on current driving patterns and projected increases in fuel economy, we need innovative solutions to close this gap.”

{mosads}Blumenauer says $48 billion has been moved from the General Fund to the Highway Trust Fund over the last four years, but that the fund needs another $15 billion a year — on top of the gas taxes already collected — just to stay at 2009 funding levels.

His bill, H.R. 6662, calls on Treasury to study other funding alternatives, including a Vehicle Miles Traveled (VMT) program.

A VMT program was proposed twice last year. In March 2011, the Congressional Budget Office released a report saying such a program is a “practical option” for raising new funds. Among other things, CBO suggested that devices could be installed on cars that read how far the cars have been driven, and that these devices could be read electronically at gas stations.

Just weeks later, a draft transportation bill from the Department of Transportation proposed a study of a VMT program. That draft proposed the creation of a Surface Transportation Revenue Alternatives Office that would be tasked with studying the issue.

Among other things, that office would be called on to “increase public awareness regarding the need for an alternative funding source for surface transportation programs and provide information on possible approaches.” The White House quickly disowned this section of the bill, and said the language was part of an early draft that was not approved by the administration.

Blumenauer said his home state and others have tested VMT fees, and said his bill would start the process of testing such a system on a nation-wide basis.

“While evaluating mileage-based revenue sources, this legislation will ensure the system protects privacy and is simple to administer,” he said. “It will also convene working groups to address the most complex aspects of this transition, including road use, demand management, climate change and technology needs.”