Consider This a Warning: States Cruising Towards Bigger But Smarter Highway Tax

Thomas Warns*

This week Evan Halper wrote an article in the L.A. Times detailing efforts underway within multiple levels of government to adjust how taxes are collected to pay for the nation’s roadways. Lawmakers are experimenting with pay per mile taxes that would be collected using mileage date collected by a tiny black box in each driver’s car. In the article, Halper writes:

“The push comes as the country's Highway Trust Fund, financed with taxes Americans pay at the gas pump, is broke. Americans don't buy as much gas as they used to. Cars get many more miles to the gallon. The federal tax itself, 18.4 cents per gallon, hasn't gone up in 20 years. Politicians are loath to raise the tax even one penny when gas prices are high.
‘The gas tax is just not sustainable,’ said Lee Munnich, a transportation policy expert at the University of Minnesota. His state recently put tracking devices on 500 cars to test out a pay-by-mile system. ‘This works out as the most logical alternative over the long term,’ he said.”

The decision to shift to a pay per mile tax is a fundamentally fair shift in policy that is long overdue. The highway tax is designed to repair our country’s crumbling roads, and our roadways crumble based on the amount of miles driven over them; the amount of gas used to drive over the road is irrelevant. Imagine two owners of the 2013 Ford Fusion – both drive the same amount on the highways every day, but one pays more money into the Highway Trust Fund because his combustion engine Fusion gets worse gas mileage than his counterpart’s hybrid Ford Fusion. Add improving gas mileage for cars across the board with the fact that the tax hasn’t gone up in years, and the result is a depleted fund that can’t keep the roads smooth.

The black box solution is not without its perils. Many fear that technology used to track the miles driven will be used to track the cars – and drivers – as well. Given the government’s desire to use GPS to track drivers without a warrant, and the ever increasing size of the surveillance state, these arguments are not without merit. The current method sparks no such fears, and is also almost impossible to dodge – taxes are paid at the time of sale every time a driver buys gas. By contrast, it is possible the devices, once installed in cars, could be altered or hacked in a way that allows some people to avoid paying their fair share. Questions also remain regarding how much the devices will cost and who will pay for them.

But alternatives exist to the black box proposal: drivers could have simpler odometer-like devices that track the miles driven, with mechanics reporting the mileage to the government at the same time that they perform emissions tests of cars (though this could also be manipulated). The black box could also provide data on mileage without permanently recording the location of motorists. Perhaps the strongest idea would combine the best of both worlds, allowing cars to send data on the miles driven since the last fill-up to the gas pump in order to charge the driver at the point of sale, making evasion less likely.

Champions of small government may cringe at the idea of installing these black boxes inside of vehicles in America, but with the Highway Trust Fund going broke it is time to start paying for our roadways through an intelligent tax, rather than with more debt. If the devices are limited in design so that GPS tracking is impossible, there is no reason why Americans shouldn’t support a fairer tax to keep up on repairs to the nation’s vital blood vessels.

*Thomas Warns is a J.D. Candidate, class of 2015, at New York University School of Law and Staff Editor of the Journal of Law & Liberty. Mr. Warns is the author of the weekly column "Consider This a Warning."