Wednesday, February 23, 2011

VMT Tax - A Viable Revenue Source?

There is a trend in the United States that fuel consumption is not increasing as quickly as vehicle miles traveled (VMT). A study on direct usage based charges for transportation funding by RAND found that, “ Since 1980, VMT has doubled while fuel consumptions has increased by only 50 percent.” (Implementable Strategies for Shifting to Direct Usage-Based Charges for Transportation Funding) The method of collecting taxes based on fuel consumption versus on how many miles one drives, has become problematic with improved fuel economy because the government is not able to produce enough revenue to build and maintain our transportation systems. It seems that this tendency will only continue into the future.

“If fuel consumption drops by 20 percent by 2017, a goal set by President George W. Bush, gas tax revenue will drop as well. But it could fall far faster. President Obama mandated that new cars get even better mileage…” (Racking up miles? Maybe not.) However, as of 2009, even though U.S. Transportation secretary Ray LaHood is willing to consider a VMT tax to help pay for our nation’s transportation systems, President Obama says no. (VMT tax smackdown: LaHood says "maybe", Obama says "no")

This trend in lower gasoline consumption and higher vehicle miles traveled is cause for alarm among policy makers and the general public. This topic has sparked debate among many to look to other forms for gaining revenue to maintain the nation’s transportation systems.


  1. Maybe the key to getting people to stop driving and take more transit is to let the highways fall apart. If we never fixed potholes in MN would people still drive? So maybe the decrease in revenue to maintain roads is a good thing!

  2. Lindsey, nice post. We may get back to talk more about this issue in the week of transportation finance.