Nevada Group Pushing New Tax on Car Miles to Fund Road Improvements

CARSON CITY – The Nevada Highway Users Coalition has announced its support for moving forward with a study on Vehicle Miles Traveled (VMT) as a potential alternative to the current gas tax paid by motorists at the pump to fund road improvements and maintenance.

According to those involved in the study, the consequences of inaction could include the deterioration of roads and highways, increased vehicle wear and tear, increased congestion and accidents and longer commute times.

But others, including the ACLU of Nevada, are questioning the proposal because of privacy concerns. Others say any such change is premature and unnecessary.

The first phase of the VMT study is being funded by the Nevada Department of Transportation (NDOT) and Regional Transportation Commissions in both Southern Nevada and Washoe County. NDOT and Washoe contributed $100,000 each. The Southern Nevada agency contributed $60,000 for a total of $260,000.

More than a dozen other states are also exploring the use of a VMT to pay for road construction.

In a statement released by the coalition, which was formed to “advance the rights of Nevada’s residents and visitors to travel on safe, reliable public roads,” the increasing use of hybrid and electric vehicles is reducing the amount of fuel tax that is collected because of their improved fuel efficiency.

“These vehicles contribute less to use the roads, despite creating the same wear and tear as gas powered vehicles,” the statement says. “This has created a further diminishing of a significant source of funds to build and maintain roads.”

The current funding for road construction, maintenance and operation comes primarily from fuel taxes, which have not been raised in Nevada since 1992.

In a VMT fee system, users would be charged based on the number of miles driven rather than paying in the form of fuel taxes. So rather than pay the 54 cents in fuel taxes per gallon at the pump charged now, vehicles would be assessed on the number of miles driven instead.

The study is being conducted with assistance from both the University of Nevada, Reno and University of Nevada, Las Vegas.

“The evaluation and studying of the VMT fees as a potential funding source is needed for the Legislature and local elected officials to make a much needed decision on how to fund our future transportation needs,” the coalition said.

The first public meeting on the issue is set for later today in Reno. A meeting is also scheduled for April 29 in Las Vegas.

The idea of a VMT is not without controversy, however.

According to the Heritage Foundation, a Washington DC-based conservative policy and analysis organization, a VMT would be expensive to implement because every car would need to be fitted with a device that both records miles driven and transmits the information to a government database.

“This complicated system would cost millions and raise concerns of Big Brother watching our every movement,” the Heritage Foundation said in February 2009. “Americans don’t like paying the gas tax, but they are sure to be even more unhappy having to deal with the administrative nightmare the VMT promises.”

Paul Enos, chief executive officer of the Nevada Motor Transport Association, said there is no need to switch from the current gas tax just to try to capture revenue from hybrid and electric cars. A simpler solution would be to increase the existing fuel tax and index it so it grows over time, he said.

“The fuel tax has 20 to 30 years of life in it,” Enos said.

The current fuel tax is one of the cheapest revenues to collect, and switching to the VMT system would expand those administrative costs significantly, he said.

Enos said his industry would end up paying more in road taxes under the VMT plan, despite claims the proposal is intended to be revenue neutral.

Those pushing the VMT don’t talk about it much, but it would allow drivers to be taxed at higher rates for using freeways during congested drive times, Enos said.

“It is social engineering at its best; or worst,” he said. “They are trying to change public behavior.”

Scott Rawlins, deputy director for NDOT, said the agency is aware of the privacy concerns expressed by some members of the public. The entire study, which will take as much as 3.5 years to complete, will consider those concerns, he said.

A public report will likely be issued within the next three to four months as part of the Phase 1 effort, but the process will also require a 12-month pilot study using as many as 1,000 volunteers before the agency could consider moving forward with the VMT concept, Rawlins said.

The switch to a miles driven tax would not necessarily be excessively complicated, given the technology that exists today with cell phone GPS tracking availability, he said.

“It might not be that complicated,” he said. “Whether we use a device in a car or a cell phone or PDA, we don’t know the answer yet.”

But the ACLU of Nevada has expressed privacy concerns about the proposal.

“What we don’t want to see is the government creating an infrastructure for routine surveillance,” said Rebecca Gasca, ACLU of Nevada public advocate. “It is important that the owner of the car be the owner of the data.”

According to NDOT, overall vehicle fuel efficiency will increase to an average 35 miles a gallon by 2020, leading to a further reduction in fuel tax collections.

Because of inflation, fuel taxes now cover only about half the cost of road construction, maintenance and operations that they funded when fuel taxes were last increased in Nevada in 1992.

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