In Our View: Gas Tax Replacement?

Fuel efficient, electric vehicles cutting into revenue needed to maintain roads

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In pondering the future of funding for roads, state governments have two primary goals: sustainability and fairness.

With that in mind, Washington is undertaking a bit of an experiment. State officials are seeking 2,000 volunteers for a pilot program to test the effectiveness of having drivers pay taxes based upon miles driven instead of the traditional measure of gasoline purchased. The 12-month experiment, scheduled to begin next year, is a harbinger for vast changes in how states collect money for the construction and maintenance of roads — changes that quickly are becoming necessary.

For decades, the primary method of transportation funding has been through a gas tax. In Washington, the rate is 49.4 cents per gallon — the second-highest in the nation behind Pennsylvania. Now, before you start complaining about how the state is over-taxing residents, keep in mind that Washington does not have an income tax — and that money for paving and building roads must come from someplace. Roads, which are necessary for a thriving economy and a high quality of life for residents, do not come cheap.

The gas-tax method of raising money is losing its sustainability, thanks to fuel-efficient vehicles and the growing popularity of electric cars. A state study a few years ago estimated that between 2018 and 2040, gas-tax revenue in Washington will drop 10 percent despite a growing population and an increase in miles driven. Other studies have predicted an even sharper decline.

The gas tax also is losing ground in terms of fairness. As drivers of electric cars avoid contributing to gas-tax revenue, they continue to add to the wear and tear on roads. If somebody drives a Tesla, they are admirably working to reduce carbon emissions, but they still should help pay for the roads they use.

A per-mile tax would address both sustainability and fairness, and Washington is wise to study that possibility. Participants in the pilot program will have four options for reporting mileage, ranging from odometer readings to using high-tech measurements through GPS or smartphone apps. In this regard, Washington is following the lead of several other states that have recognized the need to wean themselves off of gas taxes. Oregon started a pilot program in 2012, with up to 5,000 volunteers paying 1.5 cents per mile in lieu of the state gas tax; next year, a three-month test will take place along the Interstate 95 corridor in Pennsylvania and Delaware.

While a mileage tax is the wave of the future, there are some roadblocks. Critics worry about privacy issues involved with having the state track miles driven and, perhaps, where drivers are going. And the issue of out-of-state visitors using Washington roads but not helping to pay for them presents a conundrum if the state unilaterally adopts a per-mile tax.

Eventually, the solution will be a nationwide mileage tax to replace both state and federal gas taxes. The federal tax of 18.4 cents per gallon has remained unchanged since 1993 and has lost much of its purchasing power for supporting interstate highways and bridges. Only through a national mileage tax will the issues of sustainability and fairness be effectively addressed at both the state and federal levels.

In the meantime, Washington’s pilot program will provide data for assessing the most effective way to replace the gas tax that quickly is becoming obsolete. The experiment will be instructive as states prepare for the future of transportation funding.