Pay-as-you-drive concept picks up speed

Should motorists pay tax on every kilometre they drive, as if every street and highway were a toll road?

The idea is gaining traction in the United States, where politicians are seeking ways to compensate for declining gasoline tax revenues.

And these days, where the Americans go, Canada tends to follow.

U.S. motorists are burning less gas, because they're driving less and their vehicles are getting more efficient. Consumption is expected to drop significantly as tougher fuel-economy standards begin two years from now and drivers shift to electric or hydrogen alternatives.

So the federal and state governments aren't getting the cash they say they need to build and maintain roads and bridges, and support public transit. The "mileage tax" is an appealing, albeit controversial, solution.

Trial runs have been conducted in several states. It would seem simple enough to report mileage at every licence renewal and pay the appropriate fee. But that's not what's envisaged.

In Oregon, 299 volunteers had their cars equipped with GPS transponders. The gadgets relayed mileage information to special gas pumps that added 1.2 cents per mile (all figures U.S.) to the bill and subtracted the state fuel tax of 24 cents per gallon. State officials declared the experiment a success; the legislature is mulling an expanded version.

An ongoing $16.5-million, six-city federal study put tracking devices into 1,200 cars. They produce travel records that generate simulated monthly bills.

The mileage tax has high-powered backing: Supporters include California's Barbara Boxer, who heads the U.S. Senate environment committee.

In mid-February, President Barack Obama's transportation secretary, Ray LaHood, endorsed the tax. Obama's officials quickly told LaHood, "no way." But the following week, a commission appointed by Congress, in a report titled "Paying Our Way", unanimously recommended a shift to the levy.

The 15 members, mainly from politics and business, concluded the cumulative gap between the need for highway funding and revenue would hit $2.1 trillion by 2035. Americans pay far too little for their massive road network, the report states. "Our system is underpriced ... This underpayment contributes to less efficient use of the system, increased pavement damage, capacity shortages and congestion."

So this could be a hefty increase, not just tax replacement.

The tracking gear raises concerns about privacy and the American touchstone, liberty. But proponents say it's essential. Oregon, for example, doesn't intend to tax its residents for out-of-state trips, so it needs a GPS record.

Others propose to vary the tax rate for different times, days or seasons. A national system might reduce the fee in states where wide-open spaces force long drives. Above all, the designers don't seem to trust motorists to accurately report their travels.

The tax might have the environmental benefit of discouraging driving, particularly long commutes. But it's not green. Since the rate apparently would be the same for all light vehicles, it would reduce both the incentive to opt for efficiency and the penalty for gas-guzzlers.

The idea of a "kilometrage tax" is just coming on the radar here: "We're following it ... it's early days," says Canadian Automobile Association spokesperson Leanne Maidment.

Ottawa isn't yet commenting. Funding for Canada's highways isn't as directly tied to fuel taxes as it is across the border, and provinces control much of our road network.

But governments here will face the same revenue pressure as we move to harmonized North American fuel-efficiency standards and alternative vehicles.

The Americans could well blaze a trail too enticing to ignore.

And don't count the tax out just because Obama disapproves: Oregon, leading the charge, was first to impose a gas tax, 90 years ago. It wasn't alone for long, there or here.

Peter Gorrie is the Star's former environment reporter. He can be reached at peter.gorrie@sympatico.ca