Even for VMT supporters who see it as a replacement for the gas tax, many are proposing a VMT as a way to collect more revenue than the gas tax is bringing in, which will be a problem for members of Congress who do not want to vote for a net tax hike.Īside from addressing privacy concerns and environmentalist opposition to VMTs, proponents of this new tax need to decide whether they’re trying to replace the gas tax or complement it. The aforementioned House bill designed the pilot program to have a VMT replace federal gas tax revenue, but it’s far from clear that most VMT backers view it as a substitute and not an additional tax.

Speaker Pelosi got a bill through the House last year that would set up a national VMT pilot program, only to see that bill die in the Senate. The federal government has already awarded grants worth tens of millions of dollars to establish VMT pilot programs, which, in addition to Oregon, have also been launched in Utah and several other states. “In New York State,” noted a 2019 report by the Citizens Budget Commission, a New York City-based non-profit that supports the imposition of a VMT, “ideally VMT fee revenues would be used as a supplement to existing dedicated transportation revenues.” Many VMT proponents have already made it clear they view the tax not as a replacement for existing fuel taxes, but as a supplemental levy. “At a time when the state is working hard to reduce carbon emissions, it doesn’t make sense to treat a Nissan Leaf the same as a Chevy Suburban.” “Instituting a VMT tax and eliminating the gas tax would lower the incentive to buy a fuel-efficient hybrid or electric vehicle,” explained WBUR-Boston contributor Frederick Hewett. Having the VMT be a replacement for the gas tax could run into resistance from environmental organizations, who are among the most influential constituencies for the Biden administration and congressional Democrats. “If it increased total taxes assessed on truckers (rather than substituting for existing taxes), it would cause a shift of some freight shipments to rail and would increase the prices households paid for shipped goods,” the CBO concluded.

If vehicles that get fewer than 20 mpg are eventually forced to pay a VMT but also have to pay a state gas tax that is not credited against VMT paid, we can see how a national VMT program could lead to many Americans, depending on what car they drive, having to pay a VMT, federal gas tax, and state gas tax.Ī Congressional Budget Office report on VMTs released in October 2019 underscores what a difference it makes, in terms of economic impact, whether a VMT is a replacement for a gas tax or is imposed in addition to it. Legislation was introduced in the 2021 Oregon legislative session that would make the VMT mandatory. 206 of the 611 vehicles in Oregon’s pilot program that year got 22 miles per gallon, 221 got somewhere between 17 to 22 mpg, and 184 of them get fewer than 17 miles per gallon. In 2019, Oregon lawmakers expanded their VMT program and prohibited cars that get fewer than 20 miles per gallon from participating in the program moving forward. While such a pilot program was initially structured to test out a VMT as a replacement for the gas tax, it has strayed from that goal in ensuing years to the extent that it seems many VMT proponents now envision the levy as an add-on and not a replacement to the gas tax. The state awards program participants a credit to reimburse them for the amount they paid in traditional state gas tax. Participants in Oregon’s voluntary VMT pilot program, established in 2015, pay the state 1.8 cents for every mile driven. This confusion is on display in Oregon, the first state to launch a VMT pilot program.

Setting aside the arguments for or against a VMT, VMT proponents still haven’t decided whether the VMT should replace or be assessed in addition to existing federal and state gas taxes.

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