Lawmaker: Use Postal Service to test vehicle-miles-traveled fee

“Ranking Member Graves believes that ultimately all the current user fees that go into the Highway Trust Fund [HTF] should be replaced with a VMT,” a committee spokesman told FreightWaves. “In his Republican highway bill last Congress, the STARTER Act, a provision in it provided for a national VMT pilot, with the view that after that pilot, we then begin the transition. He continues to support this concept.”

Also open to the concept is U.S. Department of Transportation Secretary Pete Buttigieg. During his confirmation hearing in January, Buttigieg told lawmakers that eventually replacing fuel taxes with a VMT “is going to have to be a conversation not only in the administration but with Congress too.”

Graves did not specify whether his plan would involve the Postal Service’s current fleet or new fuel-efficient delivery vehicles that will be replacing them. The agency announced in February that defense contractor Oshkosh Truck Corp. (NYSE: OSK) had won a contract to build the next-generation vehicles, with plans to deliver 50,000 to 165,000 to the agency over 10 years beginning in 2023.

Graves noted, however, that because the agency’s new fleet will reduce fuel consumption, “it will also reduce the amount of revenues generated for fixing the Nation’s roads and bridges. This continued shift toward electrification further underscores the need to eliminate the gas tax and diesel tax for all drivers in the United States and replace those taxes with a VMT user fee.”

A VMT fee could be applied by either levying a flat fee per VMT or by developing a tracking system – for trucks, through an electronic logging device – with different rates for different locations. The non-profit Tax Foundation noted that a flat fee per mile based on vehicle weight measured by the odometer would be the simplest version of a VMT tax to administer. Odometer readings could be done at yearly inspections or by installing an on-board-unit that electronically transmits VMT to a central computer.

Those opposed to using a VMT to replace fuel taxes in the next highway bill — which includes the American Trucking Associations (ATA) — contend that it will require at least a decade to generate revenue because the technology required for it is not yet developed. ATA also has asserted that while it is open to discussing the idea, data privacy and security issues must still be addressed. The group supports raising the gas tax instead.

Tax experts say that because fuel taxes were not indexed to keep up with inflation when they were last increased in 1993 (to 22.4 cents a gallon for diesel and 18.4 cents a gallon for gasoline) and because vehicle fuel efficiency has improved, the tax has lost over 40% of its purchasing power.

“The Highway Trust Fund continues to lose more and more revenue because not all users are paying their fair share given increased fuel efficiency and electric vehicle technology,” Graves said. “We’ve seen enormous progress at the state and regional level, where multiple pilot programs for VMT systems and alternative revenue collection programs have demonstrated success. It’s time to move this solution toward reality.”

The Postal Service did not immediately respond to a request for comment on Graves’ proposal.

• Buttigieg: Raising gas tax ‘on the table’ to pay for infrastructure
• Bipartisan report argues for ‘one last increase’ in diesel tax
• Tech group calls for national road-user fee

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