States looking at ways to implement mileage-based transportation taxes; it’s complicated.

Governing magazine reports on ways state governments are considering putting in place a pay-per-mile system for financing transportation projects. There are some hurdles to clear. The magazine reports California has moved further along in the process than most states.

The state conducted its own test-run of 5,000 vehicles a year ago, the largest experiment of its kind in the country. Its test run lasted for nine months through March 2017, and it included trucking companies along with motorists from every county in the state.

California gave participants seven ways to track their mileage, including odometer checks, permits for a set number of days, permits for a certain allotment of miles, plug-in devices, smartphones and in-vehicle telematics like OnStar or Acura Link. The various methods were meant to give users options that protected their privacy – one of the biggest stumbling blocks in selling the mileage-charge systems to the public. But 62 percent of the participants in California’s study chose options that tracked their location anyway.

The state’s report on the pilot found that the options with the best privacy protections – like odometer checks – would also be the hardest to enforce. The most reliable methods for tracking mileage were plug-in devices (that fit into a ports in vehicles that are often used by mechanics to diagnose mechanical problems). But those devices are also likely to be obsolete by the time any widespread mileage fee could be imposed.

In Minnesota, policymakers are considering the idea that car ownership itself may influence funding.

Minnesota is exploring the idea of imposing taxes on transportation companies like Uber and Lyft, rather than individual drivers, with the idea that individuals may be less likely to own their own vehicles as ride-hailing, car-sharing and autonomous vehicles become more common.

The federal government has jumped in, as well. Congress included $95 million in grants in its last five-year highway funding law for states to study mileage-based fees and other alternatives to the gas tax. States must match the federal grants 50-50. In the first two years of the program, the Federal Highway Administration has doled out money to eight states, but two of those grants were actually on behalf of regional coalitions, each with more than a dozen states.

“The next stage of this is: How could you ultimately get to a national system?” says Jack Basso, the chair of the Mileage-Based User Fee Alliance. It’s a pressing question, because, barring any major new money from a new infrastructure push from the Trump administration, the country’s major transportation programs are only funded through 2020, and gas taxes don’t bring in nearly enough money to pay for the current level of spending.

Washington, as we’ve written, is undertaking its own experiment. If, as appears likely, there is to a be a transition to reduced reliance on motor vehicle fuel taxes, there’s a lot to learn in a relatively short time.

                        – Opportunity Washington

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