VMT is the way to go

No need to fear this tech-driven user fee

THE COMMONWEALTH IS ABOUT TO TAKE an important step toward making our state’s approach to transportation funding more stable, fair, and transparent.  The Legislature has included language in its recent transportation bond bill that directs the Massachusetts Department of Transportation to apply for federal funding support for a vehicle miles traveled, or VMT, pilot program.

The federal FAST Act (the Fixing America’s Surface Transportation Act), enacted into law late last year, established a five-year, $95 million program designed to encourage states to innovate in this area. The bond bill on the governor’s desk would require Massachusetts to apply for some of this money, and initiate a voluntary pilot program for up to 500 motorists.

I’ve talked about VMT before. VMT is a 21st Century approach to raising transportation revenue from transportation sources. VMT is a user fee, designed to charge motorists for their actual highway use by charging a fee-per-mile traveled each day.  VMT would not charge for travel on local streets, but rather would charge motorists who use the state highway system and interstate highway system.  Through the use of currently available technologies, VMT would behave like your car’s odometer – it does not need to know your location, it just needs to know how many miles you have driven on state or federal highways.  With that information, VMT can apportion costs in a transparent and totally fair manner.

Because VMT is technology-driven, it can be designed to provide ultimate regional equity.  For example, the state could impose a statewide “base fee” that every driver would pay.  But it could impose a cap on that base fee for drivers in more rural parts of the states, where by definition people need to drive longer distances to access jobs, health care, and other destinations.  Thus, if you live in Berkshire or Franklin counties, the state can charge you a low base VMT fee, and nothing more. If you drive into more urban and congested areas of the state, then the state could charge you more – a simple and effective approach that responds both to “supply and demand” and to actual vehicular impacts on roadways.

Pursuing a VMT approach to transportation funding and fairness is long overdue.  In 2007, the state’s bipartisan Transportation Finance Commission (on which I served) strongly recommended VMT as a powerful way to fund our transportation needs.  The commission said, in clear and unambiguous terms, that “the Commonwealth should move to a direct system of road user fees as the principal source of transportation funding using modern technology.”  Nearly 10 years later we have made no progress whatsoever in making that happen.  Now, with the language offered up by the Legislature to the governor, and the opportunity to pursue federal funding support, we have that chance.

Massachusetts cannot allow itself to be left behind.  Oregon and California are leading the way, and many other states across the nation are actively advancing their movement toward VMT.  Delaware, Pennsylvania, Connecticut, New Hampshire, and Vermont are considering collaboration on the feasibility of an I-95 corridor approach to VMT, something akin to the E-ZPass approach to toll interoperability.

Whenever a new idea is introduced that changes old, entrenched ways of doing things, some people get anxious. Their anxiety is often based upon a lack of understanding of the facts, or a baseless fear of the unknown. I’d like to address a few concerns head on.

First, VMT is not a tax.  It is a user fee – indeed, it is the purest form of user fee, charging motorists only for what they use and not a penny more.  It is significantly fairer than the gas tax. As the Transportation Finance Commission said in its 2007 report, the gas tax “is a blunt instrument because it varies from vehicle to vehicle according to fuel efficiency, and does not reflect the value of roadways being traveled. The gas tax also cannot reflect the difference in value of driving on congested roadways at peak periods versus using those same roads when there is plenty of capacity.”  What’s more, the gas tax is both politically unpopular and it is a revenue source in steady decline, as vehicles become increasingly fuel efficient, and as electric and hybrid vehicles slowly but surely begin to proliferate.  Massachusetts now has the opportunity to begin the necessary task of weaning itself off the waning and unpopular gas tax, replacing it with a 21st Century revenue system.  The gas tax is a 20th Century dinosaur, and we need to recognize that fact and move on.

Second, VMT does not threaten anyone’s personal privacy.  Some people are concerned that VMT, if GPS enabled, will provide their origin and destination information to public authorities.  That fear has been proven to be baseless.  Oregon has demonstrated that privacy can be rigidly maintained in a system designed well.  California VMT volunteers will have the option to use a system that tracks their driving via GPS or other options such as odometer readings. The bottom line is that the only piece of data that anyone needs to have in order to make VMT work is how many miles you have driven on designated state and federal highways.  Origin and destination information is neither necessary nor required, and privacy concerns can easily be put to rest.  By the way, anyone concerned about privacy in connection with VMT, who also uses the Bluetooth function on their smartphones, may reconsider their position, as today our real-time highway information data is collected from Bluetooth signals coming from your mobile phone.  We live in a technocentric world, and most people understand that and are not perturbed by the changing paradigms that technology requires us to understand and accept.

VMT can be a powerful way to generate stable and robust transportation revenue.  The Transportation Finance Commission calculated that if a broad-based road user fee of 5 cents per mile were in place just on our interstate road system, the Commonwealth could net approximately $550 million per year, or $5.5 billion over 10 years.  Massachusetts has struggled for decades to adequately fund its transportation system.  Along the way we have fought over unpopular gas tax increases, put into place a toll system that unfairly imposes costs only along the east-west corridor, used sales tax revenues that could be going to health care and education and public safety and diverted them to transportation. I say that it is time to link transportation revenue to transportation sources, and to adopt approaches to raising transportation revenue that are regionally fair and transparent.

For those of you who expect state government to embrace and implement innovative tools to make our lives better, VMT is the answer.

For those of you who expect our transportation policies to reflect our values and move away from reliance on fossil fuels, VMT is the answer.

For those of you who expect a transportation funding system based on regional equity, fairness and transparency, VMT is the answer.

Meet the Author

I earnestly encourage the governor to sign this bill into law without amendment or reservation.  By doing so, he will be signaling that Massachusetts will not be left behind, that we will embrace innovation, and that we will advance the cause of regional equity and funding transparency.

James Aloisi is a former secretary of transportation and a principal at the Pemberton Square Group.