BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AJR 5
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR:
B. Lowenthal
VERSION: 3/29/11
Analysis by: Carrie Cornwell
FISCAL: no
Hearing date: May 10, 2011
SUBJECT:
Transportation revenues: vehicle miles traveled
DESCRIPTION:
This resolution urges the federal government to study the
feasibility of collecting transportation revenues based on
vehicle miles traveled (VMT) to create a reliable and steady
transportation revenue source.
ANALYSIS:
Existing federal law imposes an excise tax of 18.4 cents per
gallon on gasoline and of 24.4 cents per gallon on diesel. The
federal government first imposed an excise tax on gasoline in
the 1930s and imposed the current tax rate in 1993. The
resulting revenue stream provides the primary and largest source
of federal transportation funding. Because these federal
excise taxes on transportation fuels do not adjust with time or
inflation, this revenue stream shrinks over time as inflation,
improved vehicle fuel efficiency, and the increased use of
alternative fuels occur.
The federal transportation act of 2005, known as the Safe,
Accountable, Flexible, Efficient Transportation Equity Act - A
Legacy for Users (SAFETEA-LU), established the National Surface
Transportation Policy and Revenue Study Commission to examine
the condition and future needs of the nation's surface
transportation system, as well as short- and long-term
alternatives to excise taxes on fuels. After months of study,
the commission issued its report in December 2007. Among its
recommendations was consideration of a VMT fee.
This resolution respectfully requests that the President and the
Congress of the United States enact legislation to study the
AJR 5 (B. LOWENTHAL) Page 2
feasibility of collecting transportation revenues based on
vehicle miles traveled to create a reliable and steady
transportation funding mechanism.
COMMENTS:
1. Purpose . The author notes that the current federal
transportation funding mechanism is unsustainable over the
long term. To wit, the federal fuel tax experienced a 33
percent loss in purchasing power since 1993. Similarly,
the state's 18-cent gasoline excise tax has experienced a
29 percent loss in value since 1994, the year of its last
increase. Additionally, further erosion of state and
federal fuel taxes will occur as fuel efficiency and the
use of alternative fuel vehicles increase.
While the fuel tax is eroding, use of the transportation
system is steadily increasing. In California, the California
Transportation Commission notes that travel on California's
roads increased by 35 percent between 1991 and 2006.
The author reports that numerous states have already begun to
consider the possibility of instituting VMT fees to support
transportation infrastructure. While recognizing the value of
each state's experience, she also asserts that it is important
that a coordinated national effort take place. This
resolution encourages the President and Congress to order a
feasibility study to evaluate methods for a mileage-based
transportation fee system to replace the current fuel tax.
The American Lung Association, writing in support, notes that
VMT fees not only could help protect transportation revenues
but can also better signal to the public the actual costs of
driving and help encourage healthier, more active
transportation choices that favor walking, biking, and transit
use. These in turn fight air pollution, climate change, and
chronic illnesses, such as obesity, diabetes, and heart and
lung disease.
2.VMT fee challenges . Implementing a VMT fee involves a number
of operational, technological, and institutional challenges,
including determining the method for calculating the miles a
vehicle is driven, the process by which mileage data is
transmitted to a tax collection agency, contingencies to
address potential equipment failures, adequate privacy
protections, and a strategy for transitioning from the fuel
AJR 5 (B. LOWENTHAL) Page 3
tax to a VMT fee, if it is to replace the existing excise
taxes. Before policy makers can assess whether or not a VMT
fee is a feasible source of revenue, someone must catalog and
understand these varied issues. This resolution asks the
federal government to take on this task.
The federal government has already done some research on
implementing a VMT fee. Through SAFETEA-LU, Congress funded a
study that the University of Iowa Public Policy Center
conducted to see how the public responds to a mileage-based
road user charge system. The researchers completed their
field testing, which took place in 12 cities around the
country, last summer. Those who participated in the field
tests had an on-board computer temporarily installed in their
vehicles, which stored a record of charges due from road use.
The information collected was uploaded to a processing center.
If the federal government were to implement a VMT charge, the
processing center would then bill the vehicle owner. For the
study, however, no money was collected. Currently, the study
team is analyzing data collected from participant surveys and
computers. The results of the study will be presented at a
Congressional hearing sometime in 2011.
The author of this resolution hopes that the federal
government will now go a step further and conduct a
feasibility study that will use the information already
garnered and look at how a VMT fee could be practically and
equitably implemented. For example, would it be a flat
mileage fee or graded depending on other considerations like
vehicle weight, fuel efficiency, or where the driving occurs
(i.e., urban vs. rural areas)? Also, the study should
consider what method would be used to collect mileage data and
maintain privacy.
3.Previous legislation . SB 1299 (Lowenthal) of 2010 would have
required the California Department of Motor Vehicles to
develop, implement, and report to the Legislature the findings
of a pilot program designed to assess various issues
associated with implementing a VMT fee in California. The
Senate Appropriations Committee held SB 1299 on its suspense
calendar.
AJR 5 (B. LOWENTHAL) Page 4
Assembly Votes:
Floor: 46 - 16
Trans: 9 - 2
POSITIONS: (Communicated to the Committee before noon on
Wednesday, May 4,
2011)
SUPPORT: American Lung Association
OPPOSED: None received.