Road-user fee advocates warn Congress: Give truckers priority
The trucking industry was given a wide berth by tax policy experts called to Capitol Hill Wednesday to testify on funding options that will keep the highway trust fund (HTF) from going bankrupt.
For more than a decade, the government has been spending more each year from the HTF than the revenues collected for it, the director of microeconomic analysis for the Congressional Budget Office (CBO), Joseph Kile, told the U.S. Senate Environment and Public Works Committee.
Those revenues come mostly from taxes on gasoline and diesel fuel. However, because those taxes have not been increased since 1993 – in addition to less tax being collected due to more fuel-efficient cars – the CBO estimates that trust fund balances in both its highway and transit accounts will be wiped out in 2022.
“The total shortfall over the next 10 years is expected to be $195 billion in CBO’s baseline estimates,” Kile said. “If the trust fund balances were to be exhausted, the federal government would be unable to make timely payments to states. As a result, states would face transportation project planning challenges.
Four of the five participants at Wednesday’s Senate hearing supported replacing the gas tax with fees based on road use through a mileage-based user fee (MBUF). User fees have been gaining bipartisan support in Congress as a way to shore up the trust fund.
In assessing such a fee on commercial trucks, the CBO found that each 1-cent-per-mile would raise $2.6 billion per year if levied on all commercial trucks and all roads.
But several participants warned against disproportionately harming through user fees.
“Our national and multistate truck pilot [projects] brought truckers directly into the MBUF conversation, and showed that using the same per-mile rate-setting approach for cars and trucks – or even the same approach for all trucks – can end up penalizing fuel-efficient trucks and lead to other unintended consequences,” said Patricia Hendren, executive director of the Eastern Transportation Coalition.
“Any rate-setting system should reflect the complexity of the trucking industry and understand that trucks are not big cars.”
Robert Poole, director of transportation policy at the Reason Foundation, a libertarian-leaning think tank, cautioned “very seriously” against singling out the trucking industry as the place to start when implementing user fees.
“The trucking industry, while participating commendably in some of these pilot programs, also just published a big report making very pessimistic assumptions” about a vehicle-miles based tax, Poole said.
“There’s a lot of persuading that needs to be done. The worst thing that policy can do is single them out and make the trucking industry go first. That would create a backlash that I think would be very damaging.”
The report Poole referenced, published by the American Transportation Research Institute in March, underscored concerns by the trucking industry about data used to track and log mileage in an MBUF that could be exploited for other purposes.
According to Hendren, those concerns are beginning to ease, at least on the passenger side, where pilot project participants who ranked privacy as a high concern dropped from 49% to 15%. “The decrease in privacy concerns can be linked to participants’ firsthand interaction with MBUF technology, a deeper understanding of how MBUF works, and having mileage reporting options to choose from as part of the pilot,” Hendren said.
“Our findings, which are consistent with pilots performed around the country, highlight the value of continuing state- and multistate-led pilots as a means to address the public’s very real privacy concerns.”
Both the Senate and U.S. House of Representatives are working on a multi-year surface transportation reauthorization bill that is separate from President Joe Biden’s ambitious infrastructure package. As with Biden’s plan, the hard part will be getting agreement on how to pay for it.
Sen. Shelley Moore Capito, R, West Virginia, the committee’s ranking member, pointed out that Secretary of Transportation Pete Buttigieg already has walked back recent public statements that considered road user fees and gas tax increases as potential funding options. “He took those off the table rather rapidly, which I was sort of surprised about,” Capito said.
This article originally appeared on Freight Waves