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State Eyes Use-based Road Taxes
By Lisa Vorderbrueggen

Imagine a world with no gas taxes. Instead of shelling out 38 cents a gallon in taxes at the pump, an onboard computer records your travel and you are charged for where and how many miles you drive.

One day, using 21st century technology, this could be how motorists pay for roads.

California has joined eight states in a study of whether global positioning satellite, or GPS, tracking can offer an alternative to the gas tax, the staple of transportation funding since the 1920s.

The issue is especially critical in California, which leads the nation in the push to replace smog-producing gasoline fueled vehicles with alternatives such as electric batteries or hydrogen.

But if California is too successful, it will jeopardize its primary source of cash for transit, road repairs and expansion.

Californians pay $6 billion a year in federal and state taxes on gasoline and diesel fuel. Such taxes comprise 85 percent of the state's annual transportation budget.

"The gas tax is good for another seven or 10 years, but as we move to a system where we don't use gasoline or diesel fuel, we have to find some alternative ways of charging the users," said Professor Martin Wachs, director of the Institute of Transportation Studies at UC Berkeley and co-author of the soon-to-be-released report, "Reforming Highway Finance: California's Policy Options."

The states commissioned the three-year, $770,000 feasibility study earlier this year from a research team at the University of Iowa.

Minnesota is leading the study with funding from Kansas, North Carolina, Texas, Washington, Iowa, Wisconsin and the Federal Highway Administration.

The idea is to charge people based on where and how many miles they drive, explained lead researcher David Forkenbrock, director of the university's Public Policy Center.

Each vehicle is equipped with GPS equipment and geographic information system software.

An onboard computer records how many miles a driver travels on each road. The state, county and city determine the appropriate charge per mile.

At the end of the month, the driver uploads the data to a central processing center, which, like a credit card company, sends the driver a bill and each jurisdiction its money.

"There are some issues to resolve, such as privacy, but this is something that needs to be researched," Mr. Forkenbrock said. "The fuel tax is in trouble for a lot of reasons, and if we want to continue to maintain and improve our transportation system in the long term, we need to find a new way to pay for it."

The study is also a chance to rethink the gas tax, added Adeel Lari of the Minnesota Department of Transportation.

When the fuel tax was conceived in the 1920s, it was the "ideal user fee, because all the cars and all roads were two-lane dirt tracks," Mr. Lari said. "Times have changed. We still have those dirt tracks, but we also have expensive freeways. We have compacts with great fuel efficiency and SUVs and tractor-trailers. The gas tax is not a valid user fee any more."

Charging people based on how much they drive was met with enthusiasm from an economic analyst with the Environmental Defense Fund's Oakland office.

This group advocates direct user fees on highways and so-called "hot" or "Lexus" lanes, where solo drivers pay to use carpool lanes.

"The drawback of the gas tax is that while it's roughly driving-related, it has nothing to do with congestion," said Dan Kirshner, the EDF analyst. "If people had to pay for their own congestion, it might influence people's driving patterns."

Lisa Vorderbrueggen is a staff writer for the Contra Costa Times, covering growth and transportation. This article, reprinted with permission, originally appeared in the December 18, 2000 issue of the newspaper.

But privacy, not equity, is arguably the biggest issue.

Critics are already calling the concept Orwellian, a blatant example of Big Brother at work.

"It's a truly awful idea," said Richard Smith, chief technology officer for the Denver-based Privacy Foundation. "I don't see an overwhelming public need for government to know where we drive. There are anonymous ways to charge us for using the roads."

New uses for technology often have benign or laudable beginnings, Mr. Smith said.

"But you don't know how this data might be used beyond its stated purpose. Are we going to start getting speeding tickets because the GPS has the ability to record our miles per hour? Could a court order us to turn over the data in our car to the insurance company? There are a lot of questions out there."

Even wireless marketing experts admit the public may not be ready for the government to track their driving habits.

"The concern I think the public will have is about the government and its access to information about where they've been in their cars," said Clem Driscoll, a marketing analyst and president of C.J. Driscoll Associates in Palos Verdes Estates. "People don't have a problem with the technology. They just want to know what the information is going to be used for and who will have access to it."

The system can be designed to protect privacy, countered Mr. Forkenbrock, the University of Iowa research team leader.

Laws can be passed about how the data can be used, which is done for medical records.

Even wireless marketing experts admit the public may not be ready for the government to track their driving habits.

In the Bay Area, for example, people who use the e-tolling FasTrak system are already being tracked to determine the extent they use the toll bridges. Caltrans has promised that the data will only be used for billing purposes.

Drivers can be given full control over what information is passed to the government for tax purposes, Mr. Forkenbrock said.

"It could be as simple as a mileage total at the end of the month or as complex as a record of what road a driver was on at what time and for how long," he said. "It would be up to each state."

The debate has plenty of time to incubate.

California has ordered automobile manufacturers to bump up the production of zero-emission and hybrid vehicles to 10 percent of all sales by 2003. Other states have said they will follow.

But with steady growth in the numbers of miles driven by Californians and the increase in the use of less fuel-efficient SUVs, electric or hydrogen-powered vehicles are not likely to cripple the gasoline market anytime soon.

"To steal a line from Mark Twain, reports of the demise of the gas tax are greatly exaggerated," said Steve Heminger, deputy director of the Metropolitan Transportation Commission. "It's been collected for 70 years. The collection costs are low and almost fraud-free. It would take a very good system indeed to replace it."

"To steal a line from Mark Twain, reports of the demise of the gas tax are greatly exaggerated," said Steve Heminger, deputy director of the Metropolitan Transportation Commission.