MPC: Vehicle Miles Traveled Tax Makes Sense, Won’t Happen for a While

electric car charging point
Cullerton: This guy is partly to blame for falling gas tax revenue. Photo: Frank Hebbert

Earlier this month the Metropolitan Planning Council released a report that found Illinois needs to raise $43 billion in revenue over the next decade to get our roads, bridges, and transit lines in a state of good repair. They called for raising the state gas tax, which has stayed flat at 19 cents since 1991, as well as raising vehicle registration fees. That idea got a mixed reception from state politicians, some of whom viewed a gas tax hike as political Kryptonite.

Interestingly, Senate President John Cullerton came out with his own infrastructure funding plan this week. He proposed implementing a vehicle miles traveled tax as a way to deal with falling gas tax revenue due to the growing popularity of more fuel-efficient hybrid and electric cars. Cullerton noted that even so-called “green” cars inflict wear-and-tear on Illinois roads, so It’s necessary to develop a more effective way to tax them.

“If all the cars were electric, there would be no money for the roads,” Cullerton told the Daily Herald. “The Prius owners are the reason we need the bill,” he said.

There are a several ways the VMT tax could potentially be collected, ranging laughably simple to high-tech. The first would be have drivers simply agree to pay the 1.5-cent per year based on the assumption that they’ll drive $30,000 miles a year, for an annual total of $450. Of course, that would be a great deal for Illinoisans who drive much more than that each year, and a terrible for those who drive much less.

A second option would be to have citizens self-report their mileage on a paper form. What could go wrong?

A third alternative would be an electronic device that would hook up to your vehicle’s odometer to provide an accurate count of how many miles you drive. However it might not know when you’ve left the state or are driving on a private road and therefore arguably shouldn’t be taxed by the state for those miles.

The most high-tech solution would be a GPS-powered gadget that can accurately keep track of exactly how many miles, on what roads, you’ve driven. Of course, there’d be privacy issues. What guaranteed would there be that a technician wouldn’t blackmail you after they observed you driving to a hideaway with your secret paramour? But that’s merely a hypothetical at this point.

John Cullerton.

Cullerton acknowledged that his plan would favor the drivers of inefficient vehicles, who would likely pay proportionately less in VMT tax than they currently do in gas tax. Meanwhile, hybrid drivers would pay more, but Cullerton said they’d be paying less in fuel costs already, so things would more or less even out.

The bill would create a task force to look into the best way to implement the tax, which Cullerton said probably wouldn’t be collected for a few years, until all the technological and legal kinks are worked out.

Governor Rauner’s office is currently reviewing the legislation. It may go up for a vote in the near future.

The Metropolitan Planning Council recentl presented their own infrastructure funding bill, sponsored by state senator Heather Steans (7th) and they visited Springfield twice this week to lobby for the legislation. Their bill also calls for a VMT tax, so be implemented by 2025.

While it appear Cullerton is trying to get the VMT tax going sooner, he may have his work cut out for him, said MPC spokesman Ryan Griffith-Stegink. “All signs point to VMT being the future of revenue collection, bust this is something we should have gotten started on in the past,” he said. “In the time it takes to get this going, we feel it’s important to rely on our existing revenue strategies to start filling that $43 billion gap.”

Cullerton said he’d like to see Illinois become the first state to implement a VMT tax statewide, but we’re a little late to the party. California will be launching a 5,000-person VMT pilot this year called the California Road Charge, and they should have the results by the end of 2017. Meanwhile, Orgeon is already piloted three different methods of VMT tax collection as part of a program called OReGO.

Griffith-Stegink pointed out there will be some equity issues to sort out. For example, we don’t want to penalize people who have no choice but to drive many miles to work, or to run errands.

While MPC doesn’t expect to see a VMT tax implemented until three-to-five years from now, Griffith-Stegink credits Cullerton with getting the ball rolling. “It’s simply not a long-term strategy to tie infrastructure funding to a gas tax,” he said.

But in the meantime, he said, it makes since to work on raising the gas tax and vehicle registration fees now, and possibly combine one or both of these with a VMT tax in the future. “It’s not an either-or situation,” he said. “It’s an ‘and.’”

  • Interesting observation about not penalizing those who need to drive far to work. Nobody drives for a long commute who doesn’t have to though, especially the rich. Granted there was a choice to live way out there but maybe when the home was bought the work was close by until they go laid off. And all that.

    But lets face it, any tax that depends upon driving is going to be regressive towards the middle class and poor. As always the largest tax burdens should fall on those who can afford to pay. Especially infrastructure maintenance costs.

    But that said taxes can be a form of encouragement towards behaviors most beneficial to society. So yes a VMT could be a tool for that. And at the moment the behavior that needs changing is pollution creation. Electric cars will solve that issue, at least as far as the electricity is cleanly generated. An electric car owner has paid forward their duty.

    So in the next case that behavior needs to be modified is the creation of road congestion. So congestion charging is the tax for that. Any place at any time that gets congested becomes a candidate for congestion charging. We could consider skipping the Ashland BRT if we simply start congestion charging at the spots and times that become congested. Then the regular buses will speed up nearly equal to what BRT might offer. And not just on Ashland.

    Imagine, if you will. You are driving along with your transponder and you see the congestion charging light (at the side of the road or on your device) turn to waning that this stretch of road is about to enter congesting charging. You then either sigh in relief that you will make your meeting or you curse and turn off onto your alternate route. If you keep going the congestion charge kicks in after a bit and as it gets more congested your per mile fee starts going up. Cars start exiting left and right before the next charge point. Traffic starts dwindling and your speed starts going up. Then your fee starts dropping. It is a delicate balance, some can afford some bail.

    Transit riders meanwhile are oblivious. No stress for them as they read their novel and their bus speeds along quickly and consistently. Meanwhile so do the self-driving electric cars which have been set for some target range between time and cost of the trip. The world is a happy place as there is plenty of clean energy to run the life-saving air-conditioning in each vehicle type as the outside temperature rises into the 120 degree Fahrenheit range because of the momentum still pushing temperatures up since the insanity of the first twenty years of the beginning of the third millennium on top of the mere stupidity of the previous one hundred.

  • Bobo Chimpan

    Is the mile-traveled tax going to take into account the weight of the vehicle? Will a Vespa vs a motorcycle vs a Mini Cooper vs an SUV vs a box truck vs a semi pay the same per mile? If this is really about wear and tear on roads, drivers of heavier vehicles should be paying more.

  • Bernard Finucane

    Since Illinois is a vast importer of fuel oil, not taxing it is economic suicide.

  • Bikegoddess Julie

    An interesting idea that will need a lot of issues worked out. But as usual Illinois is behind the times technologically and in vision. This should have been suggested at least 3 years ago.

    However, taxing road users for wear and tear makes sense as long as type of vehicle is taken into account. But as an average 4000 a year only driver, at least 15% of it out of state, I am willing to pay my fair share, but the powers that be need to recognize that not all car owners use a car as their primary source of travel in an urban area and should make certain to implement fair taxes (because we are just so used to fair taxing, lol).

  • dennis himberger

    43 Billion or Million…. the article is not consistent? 30K/per vehicle? I have 2 collector cars I barely drive. and sure there are others with MANY more that spread their ‘yearly’ 30,000 miles ($) between ALL their vehicles. overtaxing/number of vehicles is another variable for the formula? OK for first (primary) but LESS of consecutive(?) vehicles, if terminology is correct here.
    just my $.02

  • johnaustingreenfield

    Billion — sorry about the typo. Obviously, if only $43 million was needed, all that would require would be Rauner and Emanuel selling off a few bottles from their high-priced wine club.

  • ev_one

    Increase gasoline taxes across the board, and institute an electric vehicle registration tax?

  • planetshwoop

    This is easy to fix, and I’m not sure why we it didn’t come up elsewhere: just tax insurance.

    Most car insurance providers expect you to provide the number of miles driven as that drives the risk. The VMT would simply be a pro-rated fee of that amount reported. If you don’t drive much, you don’t pay much. Insurance companies are incentivized to get the amount right as it helps them correctly price the risk, thus correctly collecting the tax.

    Drive out of state? Then request a GPS device (I have one already from Allstate) that can eliminate the tax when driving in Hoosierville or Cheese Acres. Worried about the privacy? Pay the flat fee without requesting the “discount” from the data collected from out of state.

    The state of Illinois doesn’t need to be involved.

  • neroden

    Why not have the odometer checked, and the number reported to the government, when you have your inspection done? Any inspection station which reports incorrect odometer readings to the state would get in big trouble. Then you pay the tax with your vehicle registration.

    Not difficult. Not high-tech.

  • neroden

    NO. NO. NO. No special taxes which only apply to electric cars. That is a very bad idea which penalizes people who (a) buy an electric car, and (b) don’t drive it much. We should approve of those people!

    (Two states — Washington and Georgia — have already done this. The result is that for low-mileage drivers it’s cheaper to operate a gasoline car. This is a very bad result..)

  • neroden

    Agreed. This would be easy to implement as part of the annual registration fee. The vehicle weight is known. The odometer reading is known…

  • That would work.
    But the state wouldn’t get payments often because inspections are done every few years.

    Another way is to input the odometer mileage at the gas pump when you fill up. The inspection would verify your counts.

    This is essentially how Peoples Gas does it: when they can’t physically inspect your meter they estimate charges and then refund any overpayment after a physical inspection.