Utah wants to launch pilot project to tax motorists for miles traveled instead of at the pump

Modern cars are increasingly fuel-efficient — so drivers pay less in gasoline taxes used to repair and build roads and highways. Electric cars avoid the gas tax entirely.

So Utah officials foresee that in 20 years or so, they will need to recapture disappearing revenue by perhaps dumping the tax at the pump and instead charging residents for every mile they drive — based on odometer readings or metering by similar devices.

The Utah Department of Transportation said Wednesday it wants to start a small pilot project, perhaps as soon as next year, with something like 100 volunteers to test such a program.

“I strongly believe that the future will involve a more direct connection between usage [of roads] and charge,” UDOT Executive Director Carlos Braceras testified Wednesday before the Transportation Governance and Funding Task Force created this year by the Legislature.

That group also heard reports Wednesday about other states’ experiments with mileage-based road tax systems, and discussed their advantages and drawbacks.

“I don’t think it’s something that’s ripe for full implementation,” Sen. Wayne Harper, R-Taylorsville and co-chairman of the task force, said after hearing the reports about mileage taxes. “But it’s something we need to keep on the table…. I think we need to go into a demonstration and pilot program,” as UDOT is proposing.

Adrian Moore, board member of the Mileage-Based User Fee Alliance, outlined some of the reasons a mileage fee may eventually replace gasoline taxes.

“When 50 percent of the fleet is electric, there’s just not going to be enough gas tax revenue to maintain your roads,” he said. “In the long run, something is going to have to replace the gas tax.”

Not only would the new system force electric and alternative-fuel cars to help fund the roads they use, Moore said it may be more fair to others, too. He said the wealthy now escape gas tax by purchasing more expensive fuel-efficient cars, while lower-income people often drive older cars that have poorer mileage — so they pay more gas tax.

Maureen Bock said Oregon started a pilot project that she oversees, called OReGO, because the gas tax “hasn’t kept pace with the cost of actually repairing and building the infrastructure over time.” She noted her state even imposed a tax on bicycle sales to help force cyclists to pay their share of road costs.

Oregon has conducted three pilot projects on mileage taxes since 2006. Other states conducting them, or planning them now, include California, Colorado, Hawaii and Washington.

Volunteers in Oregon agree to have devices put in their cars similar to what some insurance companies install to offer cheaper rates for safe-driving practices. They track and report mileage driven in the state to third-party account managers.

Volunteers pay 1.5 cents per mile, instead of the 30 cents in state gasoline tax. They still pay that tax at the pump, but are reimbursed if the price-per-mile charge is less than what they paid — or pay extra if that charge turns out to be more.

Bock said Oregon has learned that such systems do work, but that tax-collection costs have been high and problems persist, including how to protect motorists’ privacy.

Bock said one way to protect privacy is to have drivers pay tax on all mileage reported on their odometer — but then they also pay tax on the miles they drove outside the state.

If privacy concerns are solved someday, Braceras said, it could allow UDOT to do some interesting things — including helping to eliminate congestion by charging lower mileage tax if drivers avoid busy highways at peak times.

Bock said Oregon has attempted to attract volunteers and overcome privacy concerns by offering some extra services made available by tracking devices — including such things as sending warnings to their smartphones when their car batteries are low.

For now, Braceras says UDOT hopes to start a small research-only project mostly to determine what issues and problems it needs to solve over time.

“It would just be purely research,” he said. “It would focus in on some key questions and see if we can provide another building block to this puzzle.”