Study underway to reassess gas tax

By Mike Polhamus

For Vermont Digger

Another source of money is needed to pay for road maintenance and improvement, and a study is underway to figure out what it should be.

Vermonters are driving fewer miles and using less gasoline, and the resulting decrease in gas tax revenue is draining transportation funding, a state transportation official said Oct. 9 at a renewable energy conference in Burlington.

Environmental groups, business interests and state agencies will meet in upcoming weeks to brainstorm a list of potential new taxes and fees to make up the difference, Vermont Agency of Transportation’s environmental policy manager, Gina Campoli, said.

“We have a problem,” Campoli told about 50 attendees at a panel discussion during the Renewable Energy Vermont 2015 conference.

Campoli displayed slides showing graphs with downward trajectories.

“This slide looks terrific … right? Gasoline sales are down … vehicle miles traveled – and we’ve got the new numbers for last year, for 2014—they continue to go down,” Campoli said. “This means people are driving more efficient vehicles, they’re using [electric vehicles], they’re using alternate forms of energy to power their vehicles, and they’re also traveling less.”

As a result, another of Campoli’s downward-sloping graphs showed gasoline tax revenue decreasing by about a sixth over the last decade.

In response, legislators last year directed transportation officials to “go look at some non-gasoline-tax alternatives for us, because we’re not heading in the right direction in order to keep that system in a state of good repair, safe, and … invest in bike, peds, transit and rail,” Campoli said.

Environmental groups, business interests and state agencies will convene in upcoming weeks to come up with a list of possible tax alternatives, Campoli said following the conference.

Those alternatives could include increases in “an array of fees,” such as higher vehicle inspection fees, tire fees, lease taxes and heavy vehicle registration fees, Campoli said.

The state currently directs a portion of all purchase and use taxes on new cars and trucks toward education, Campoli said. That could be diverted toward transportation purposes instead, she said.

Vermont could issue transportation investment bonds, Campoli said.

The state could also pursue a tax assessed on vehicle miles traveled, a form of taxation now being implemented in California and Oregon.

One downside to that approach is that “someone is keeping track of how far you’re driving,” she said.

A potential advantage comes from the technologies that could be employed to measure miles traveled, such as phone apps and GPS, she said. These could offer the possibility of congestion pricing (“not that we’re anywhere near doing that in Vermont,” Campoli said), a practice in which drivers are charged for driving in certain places at certain times.

Some form of carbon tax will also make the list of possible gas tax alternatives, Campoli.

The final draft of the state’s new Comprehensive Energy Plan—a first draft of which was released last week—should include a carbon tax, representatives of the Conservation Law Foundation and the Vermont Public Interest Research Group have argued.