Tax by mile?

[ColonelPanic]

Interesting article as found here: http://www.latimes.com/news/lo...localQuote »DMV Chief Backs Tax by Mile New appointee has advocated a levy based on how much and where motorists drive. Idea is gaining support, but privacy advocates worry.By Robert Salladay, Times Staff WriterSACRAMENTO — Gov. Arnold Schwarzenegger on Monday appointed a new Department of Motor Vehicles director who has advocated taxing motorists for every mile they drive — by placing tracking devices in their cars.The idea would mean a significant overhaul of how California collects taxes to maintain its often-crumbling roads. Under the plan, the state gas tax — now 18 cents a gallon — would be replaced with a tax on every mile traveled by each car and truck.The notion has not been endorsed by Schwarzenegger but is gaining acceptance among transportation and budget experts. As Californians drive increasingly more fuel-efficient cars, state officials are alarmed that the gasoline tax will not raise enough money to keep up with road needs.Charging people for the miles they drive also worries some owners of hybrid cars, because it could wipe out any gas-tax savings they now enjoy. Dan Beal, managing director of public policy for the Automobile Club of Southern California, said altering the system would remove one incentive to buying new-technology hybrid cars like the Toyota Prius, because its owner would pay the same fuel tax as a Hummer owner."You are arguing against people taking risks on technology development," said Beal, warning that some mile-tracking systems could invite fraud more than the reliable tax meters at the pump.Any change in the state's gasoline tax would have to be approved by the Legislature. Privacy advocates worry about the government tracking the whereabouts of every car in California. In one scenario — currently being tested in Oregon — tracking devices send a signal to a GPS satellite following the car, and that information would be used to calculate the tax bill. Other devices send a signal directly from the car to the pump, which calculates the tax based on the odometer reading.Annalee Newitz, a policy analyst for the Electronic Frontier Foundation in San Francisco, which monitors privacy issues, said if the device "can communicate with a satellite and then communicate back with another device on the ground, it could be used for something else. That would be my concern: How are limits placed on how this device could be used?"Yet some transportation experts say the technology has wider implications. Officials are intrigued by the idea because California could begin taxing people for using specific roads at specific times. To keep people off freeways at peak hours, for example, per-mile fees for city streets could be pegged at a lower rate than the highway. That could prompt people to use alternative routes.The governor and other top aides are exploring ways to alter our gasoline-driven society: Schwarzenegger wants more hybrid and hydrogen-fueled cars, and his new EPA secretary, Terry Tamminen, is writing a book about ending the use of oil entirely, calling it a "dinosaur."For the state budget, the trend looks grim. Revenue from the gas and diesel fuel tax — about $3.3 billion — will have declined 8% between 1998 and 2005, adjusted for inflation, but the amount of miles traveled by cars and trucks on California roads has increased 16%, according to a February report by the legislative analyst. The California Transportation Commission has said the state needs about $100 billion in road and freeway repairs.The appointment of Joan Borucki, a Democrat and longtime Caltrans official, has placed an advocate for a per-mile transportation tax within the top ranks of the Schwarzenegger administration. She included the notion in the California Performance Review, a top-to-bottom audit ordered by Schwarzenegger last year. Borucki was the leader on the transportation section and pushed the idea of an odometer-based fee at an August public meeting in Riverside.The idea has been circulating because more Californians are driving fuel-efficient cars, the review warned. Less gasoline consumed means less money for the state's coffers from the gas tax — even though people are driving and damaging roads just as much. "Electric vehicles, fuel-cell vehicles or other future fuels would not be taxed under" the existing per-gallon system, the report said.The administration said Borucki was not available Monday, but she said in a statement that she wants to transform the DMV "into a customer-friendly, service-oriented unit of our government." Borucki, who was on the California Transportation Commission for two years, still needs state Senate confirmation for the $123,255-a-year job. She started at Caltrans in 1980 and worked her way up to manager of new technology and deputy district director for planning."She's devoted, and she's knowledgeable about the state's situation," said Elizabeth Deakin, a policy expert with the UC Transportation Center who has known her for 15 years. "She understands the state's concerns about wanting good service, and she understands technology."In Orange and San Diego counties, some freeways are using what is called "congestion pricing" — vehicles pay to use certain lanes at peak hours. And two similar systems are being tested in Oregon.Around Seattle, the Puget Sound Regional Council is placing global positioning devices in 500 cars to monitor where they drive — and then calculating a usage fee based on the roads they use and the times they drive. In Eugene, Ore., test cars are being outfitted with tracking devices that link up with special gas pumps around the area.Currently, cars with high fuel efficiency and large trucks don't generate enough revenue from fuel taxes to pay for the burden they place on roads, said Randall Pozdena, managing director of ECONorthwest, an economic consulting firm. A large truck, he said, can do as much damage on a city street as 10,000 cars, but it still pays the same amount of per-gallon gasoline tax, assuming the gas was purchased in California in the first place.Drivers "can start allocating how much time they spend on each type of street," said Andrew Poat, a former Caltrans official who works for the city of San Diego. It could get even more detailed: Large trucks could be charged higher fees for using residential streets rather than more fortified freeways."It's just like water. We're trying to get water and energy meters to tell you what time of day you use energy. You use energy at peak hours on a really hot day, you pay more for that…. We need to start sending those price signals to users."Still, privacy advocates worry about "usage creep" — like how the driver's license has evolved into official identification for nearly everyone. The information collected about mileage potentially could be subpoenaed in a court case or used to track someone without their knowledge, they fear.But Pozdena and Deakin, the transportation experts, said most people don't care about this issue as much as privacy advocates, especially when presented with the possibility that as much as 25% of the road could be used by hybrids in the future. Drivers of non-hybrid cars have said it's unfair to pay the larger burden of gasoline taxes, they said. "While some people are concerned about civil liberties, most people are not," Deakin said. "One of the things we found from focus groups and surveys is that most people said if the government wanted to track you, they have other ways to do it."

[ZubenElGenubi]

>When I first heard about this I thought it was a joke...putting tracking devices in cars and taxing on mileage. Ignoring the obvious concern of putting Big Brother in the passenger seat (or "The Governator" in California's case), this is a bad idea.The argument for "per mile taxation" is that as hybrid or non-gasoline vehicles comprise a larger percentage of vehicles, the revenue from gasoline consumption taxes will decrease. While that scenario is possible, there are several inherent flaws in the proposal:1) It becomes a discentive to improving vehicle efficiency and emissions.2) It is not offered as a phased replacement of existing excise taxes (18¢/gallon in CA), but as new revenue.3) The costs of implementation and enforcement are likely to be prohibitively greater than revenues generated.

[ZubenElGenubi]

Looking at the "per mile" scenario of 25% of vehicles being hybrids.Given in California*: 825 million miles/day driven, 47 million gallons/day used, then statewide daily average mpg = 17.55. Also, 24 million registered vehicles in CA.Assume: Total number of hybrid/electric vehicles registered in CA: 22,000.I cannot find a published figure, but value is based on various online data**. This represents 0.09% of all vehicles. I'll round it up to 0.1%.Assume also: Average mpg equivalence of hybrid vehicles: 40(I know EPA estimates are higher for some models, but I'm assuming "actual results may vary".)Therefore, if total vehicle registrations remains constant (at 24 million), driven miles remain constant (825 million), and hybrid portion increases to 25% of all vehicles, average statewide daily mpg should increase from 17.55 to about 23.14. Based on CA excise tax rates and current gasoline consumption rates, this would decrease state revenues by about $745 million per year.=============================Okay. Not including implementation, administration or enforcement costs, the "per mile" rate required to make up for the potentially lost revenue would be about 0.25¢ per mile driven. At 15,000 miles a year, that equates to $37.14 in "per mile" usage taxes. Doesn't seem like a lot, but the wildcard is the cost of administering and implementing this plan. Each $100 million would add about 0.03¢ per mile.*Source: www.driveclean.ca.gov** Sources: International Energy Agency data (82,436 US total) &[url=http://www.wdtimes.com/articles/2004/04 ... imes01.txt]Watertown Daily Times (in 2003, CA=11,425; US=43,425).

[ColonelPanic]

Wow! Good job on the math! I would hope such a concept will never see the light of day. The initial capital required is mind-boggling... Adding technology to all registered vehicles, installing technology at every pump to interface with the vehicle's technology, not to mention the big brother aspect, which really bugs me. And help us if something like this ever makes it on a national scale...

[ZubenElGenubi]

Quote, originally posted by ZubenElGenubi »2) It is not offered as a phased replacement of existing excise taxes (18¢/gallon in CA), but as new revenue.Twilight Zone moment..I'm quoting myself and calling myself out on this point... I just re-read the article (and a few others) and noted that the "per mile" proposal is intended to replace the existing 18¢/gallon excise tax.==================================Taking that into account, and given some of the numbers/math I used earlier, here are some significant new results:Per the quoted article: If CA Excise Tax revenues were $3.3 Billion, then @ $0.18/gallon, that equates to 18.3 billion gals/year, or 50.2 million gals/day (this is greater than the 47 million gals/day listed by driveclean.ca.gov for 2003).Also, if miles driven per year has increased 16% from 1998 to 2005, annual miles driven would increase by about 2.14% per year. Based on 2003 estimate of 825 million miles/day (per driveclean.ca.gov), 2005 estimate would be about 860.7 million miles/day.Therefore, daily average mpg for 2005 is estimated to be 17.15 (less than my first estimate of 17.55).===================================Now, revisiting the 25% hybrid scenario:Annual excise tax revenues would decrease by 25%, or $824 million/year. Based on 2005 estimate of miles driven per day (860.7 million), this works out to 0.262¢/mile driven.HOWEVER, because the "per mile" tax is intended to replace the excise tax, the minimum rate per mile required to maintain the existing revenue stream would be 1.05¢/mile driven.Under this scenario, a vehicle driven 15,000 miles per year would have to pay $157.48 in "per mile" taxes.Here's the rub: Here's what cars with different mpg rates pay annually now @ 15,000 miles per year:15 mpg: $180.0020 mpg: $135.0025 mpg: $108.0030 mpg: $90.0040 mpg: $67.50Considering that the most expensive cars also tend to be the least fuel-efficient (ex. SUVs), doesn't this look a little regressive? Also, under the "per mile" scenario, why should a person who buys a hybrid be required to pay about $90 more per year on average than they do now?Whew....all in one breath. I think I used up my Starbucks..