Baker shortsighted on VMT

His no-new-taxes stances trumps facts, analysis

THERE ARE MOMENTS IN GOVERNMENT when a small, often little-noticed, decision has large long-term consequences. Unfortunately, Gov. Charlie Baker made such a decision last week when he vetoed a provision in a transportation bond bill that directed the Massachusetts Department of Transportation to apply for federal funding to support a VMT (vehicles miles traveled) pilot program. The governor’s shortsighted action demonstrates how his inflexible “no new taxes” stance has trumped his long and laudable record of using facts and analysis to form his position on important issues.

The 2015 FAST (Fixing America’s Surface Transportation) Act established a five-year, $95 million federal initiative to encourage states to innovate with VMT programs. The vetoed provision required Massachusetts to institute a voluntary pilot program for up to 500 motorists.

VMT in its many varied iterations will gradually supersede the gas tax as the primary means of funding transportation in the 21st century. The bipartisan Massachusetts Transportation Finance Commission (on which I served) remains the seminal work on transportation finances in the Commonwealth. In one of its key recommendations, adopted unanimously, the commission concluded that “the Commonwealth should move to a system of direct road user fees as the principal source of transportation funding using modern technology.”

What the commission had to say on VMT is worth quoting at length. “The gas tax has been a convenient means of charging road users for decades in Massachusetts and across the US, but all of our otherwise desirable efforts to reduce fuel consumption will result in less revenue from this source. Now, modern technology already allows user fees to be collected without drivers needing to slow down or stop. With such technology, our roads and bridges can be treated like other utilities — gas, electricity, water — where everyone pays in small increments based on their actual usage,” the commission’s report said.

“The Commission recommends that motorists using all major state highways should be charged a user fee,” the report continued. “Although the technology exists today to create such a user-fee-based system, the details of this concept are complicated and need to be considered carefully. Issues of concern include the choice of technology, whether or not this method of collection should replace or supplement the gas tax, potential diversion of traffic to nonpriced roads, and equity related to which roads are priced. The status quo of the current gas tax system is firmly entrenched, and while it may not be embraced enthusiastically by the public, it is a known quantity. Building the consensus around changing that system may take time, but we should begin now.”

Presented almost 10 years ago, this forward-looking recommendation is more relevant and urgent than ever. Study after study, both before the Transportation Finance Commission report and since, has documented the great need for additional revenues to support our roads, bridges, and public transit. Furthermore, the federal FAST Act recognizes the reality that states are going to have to bear an ever greater share of transportation funding with the federal government paying for a shrinking share.

Baker deserves major credit for taking on the herculean task of fixing the MBTA, but his veto is a huge missed opportunity to begin to plan for the inevitable transition to various forms of VMT in the years and decades ahead. In the peculiar logic of his veto message, Baker said that before launching a pilot VMT program the state should identify emerging technologies that could support such a program, any costs the state would incur in implementing it, and any privacy issues that might arise. Those, of course, are precisely the kinds of questions that a pilot program would help answer, and the program is voluntary for participants.

Baker also said he was concerned about the consequences of a VMT program on drivers from Worcester west who have less access to public transportation. However, one of the purposes of the pilot program would be to learn more about its impact on different regions of the state and to design a system that is fair to all drivers.

Obviously, Baker’s veto of VMT is based on his opposition to new taxes, and he acknowledged as much in his public comments. Never mind that the VMT is a classic user fee of traditional Republican orthodoxy. Never mind that the pilot project makes no commitment to actually implement VMT. And never mind that the veto is a departure from Baker’s admirable analytical approach to solving complex policy issues.

Some political leaders and others are counting on the millionaires’ tax that is headed to the November 2018 ballot as the source of additional revenues for transportation. But even if voters approve the ballot question, that will only provide a short-term fix. There is no way that the state’s enormous transportation needs can be funded by general tax revenues over the coming decades, and there is no way to ignore the reality that the gas tax will be a declining revenue source over the long term, especially with the voters’ rejection of indexing the gas tax to inflation.

Meet the Author
Baker’s veto deprives Massachusetts of the opportunity to understand the complexities and possibilities of VMT. Walking away will only make it more difficult to design a fair system that answers the very questions that Baker raises. But that will be the challenge of a future governor.

Michael Widmer is the former president of the Massachusetts Taxpayers Foundation.