Vehicle Miles Traveled Tax

Last Tuesday, February 2nd, the Senate confirmed Pete Buttigieg as transportation secretary.  The main source of federal money for highways and transit, the gasoline tax, has not been increased since 1993. Without additional revenue, the Highway Trust Fund will soon run out of money.  During his confirmation hearing and throughout his Democratic presidential nomination, Buttigieg has repeatedly floated a solution: a vehicle miles traveled tax (VMT).  Proposals for a VMT tax have been considered and rejected in years past and increased investment in electric vehicles, Democratic control of Congress, bipartisan interest, and President Joe Biden’s opposition to increasing the gas tax could jump start a push to a user-based fee.  Rep. Graves (MO), the top Republican on the House Transportation and Infrastructure committee, has long supported a VMT tax as a replacement for the gas tax, and is interested in working with Buttigieg on it.

The concept still faces significant hurdles and state lawmakers who have tested a VMT tax locally warn that a nationwide pilot and larger program would take years to develop; that is only if the government is able to assuage privacy concerns. Per the Congressional Research Service (CRS), Congress has transferred roughly $144 billion to the Highway Trust Fund since 2008 to keep it solvent. Last year, Congress provided an additional $13.6 billion to keep the fund afloat, punting longer-term decisions about the fund’s solvency to this year.