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Buttigieg proposal for VMT tax nothing new for Utah that launched pilot program last year

Northbound traffic on Interstate 15 near Lindon, near milepost 274. (Photo: UDOT)
Northbound traffic on Interstate 15 near Lindon, near milepost 274. (Photo: UDOT)
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Utah’s transportation costs over the past two decades far exceed gas tax revenue growth. The concept of generating tax revenues per vehicle mile traveled (VMT) is not something new for the Beehive State, which has explored its viability in a tax modernization proposal to fund the state's transportation needs.

Transportation Secretary Pete Buttigieg has been under fire for proposing a mileage tax but Utah has piloted a program launched last year that does tax some drivers. Utah law requires owners of alternative fuel vehicles to pay an additional fee during annual vehicle registration intended to capture some of their impact to the road system since those owners contribute little or no gas tax revenue as compared to owners of conventional vehicles. These fees pay for operations and maintenance of Utah's transportation system.

Utah’s law also requires the Utah Department of Transportation to submit annual reports on Utah’s road user charge (RUC) program and submit a plan to enroll all vehicles by Dec. 31, 2031. Eligible vehicles include fully electric vehicles, plug-in hybrid vehicles, and gasoline hybrid vehicles. Participation is voluntary and eligible car owners must opt-in. By doing so, they agree to pay a 1.5 cent per mile charge in lieu of an alternative fuel vehicle registration fee of $90 in 2020, which increased to $120 this year.

In future years, the program potentially could replace the fuel tax for all vehicles in Utah, the Utah Department of Transportation has said in past presentations. UDOT projects that Utah's vehicle miles traveled will be 51 billion miles by 2040.

Buttigieg outlined his ideas on several infrastructure proposals and said he doesn't believe gas taxes are the right long-term solution. A mileage tax that would charge drivers a cent or two for each mile on the road is something Buttigieg said should be explored.

He is quoted as saying to Yahoo! News:

I think that shows a lot of promise. If we believe in that so-called user-pays principle, the idea that part of how we pay for roads is you pay based on how much you drive.
The gas tax used to be the obvious way to do it; it's not anymore. A so-called vehicle miles traveled tax or a mileage tax, whatever you want to call it, could be the way to do it.

Buttigieg's comments drew criticism but he is far from the first to pitch the idea. States have actively studied, explored, and piloted road user charge (RUC) systems as the most likely long-term replacement for declining gas tax revenue. These efforts have been supported by the federal government via the Surface Transportation System Funding Alternatives (STSFA) grant program since 2016. Twelve state and regional pilots have received federal grants to explore alternative funding mechanisms such as road usage charges.

Additionally, the House passed a bill that would have created a federal pilot program to test vehicle miles traveled (VMT) tax. Under the legislation, the Treasury Department would impose a fee equal to the total amount collected in gas taxes, divided by the miles driven by passenger vehicles. The figure works out to about nine-tenths of a cent per mile, using data from 2019, the most recent available.

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With the Biden administration preparing to push an infrastructure package, transportation advocates like Buttigieg are hopeful that vehicle miles traveled tax is surfaces into reality.

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