Truckers could be focus of vehicle-mIles traveled tax proposals – lawmaker

Truck vehicle miles traveled could be target of lawmakers. Above the Las Vegas landscape at night (Photo: Jim Allen/FreightWaves)

Truck vehicle miles traveled could be target of lawmakers. Above the Las Vegas landscape at night (Photo: Jim Allen/FreightWaves)

Congress will consider the feasibility of applying a vehicle miles traveled (VMT) tax on commercial motor vehicle operations as a way to help pay for road infrastructure improvements, Rep. A. Drew Ferguson IV (R-GA) said today.

In Atlanta, Ferguson told the annual winter meeting of SMC3, a technology company in the less-than-truckload industry, that the VMT model, which as the name implies is a distance-based tax on a vehicle’s operations, could be on the table for trucking companies. VMT proposals would be out of the question for personal vehicles because Americans would not tolerate the federal government monitoring their driving habits with sensors attached to their cars and light trucks, Ferguson explained.

Any type of VMT proposal would need to be part of a wide-ranging initiative to raise fresh funding for infrastructure in an environment where effectively no federal money is available. After paying for Social Security, healthcare and other entitlements, the military, and interest on the national debt, there is no money left for discretionary programs, Ferguson said.

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The 2017 tax reform law permitted U.S. firms to repatriate foreign-generated assets at a rate of 15.5 percent for cash and 8 percent for non-cash assets, down from 35.5 percent. This resulted in $465 billion flowing into federal coffers through the first half of 2018. However, the federal budget is so stretched that the proceeds needed to be used just to meet the government’s basic obligations, Ferguson stated. Though there have been bills introduced to leverage repatriated funds to develop infrastructure-funding mechanisms, none have ever been seriously considered and are not expected to be for the foreseeable future, he said.

Other funding proposals, which are hardly new, include raising the federal motor fuels tax and indexing it to the rate of inflation. Federal taxes on diesel and gasoline consumption have not increased since 1993. As a result, the inflation-adjusted value of those expenditures has declined dramatically. Other headwinds include the growth of electric-powered vehicles and advancements in vehicle design, which allow users to drive longer distances without filling their tanks. This has put pressure on the traditional model of funding road programs through fuel tax receipts, and has led to serious discussions of alternate measures such as the VMT.

Progress on infrastructure programs has been non-existent during the past two years despite the $1.5 trillion infrastructure package that President Trump proposed early in his term. The proposal called for direct federal spending over 10 years of $200 billion. Of that, $100 billion would be used to create an "Incentives Program" to spur $1.3 billion in funding from states, localities and the private sector. Funding would also be derived by eliminating federal programs that are either obsolete or don't pull their weight.

Congressional Republicans have chosen to not develop their own infrastructure programs, and instead have taken their cues from the White House. Ferguson said such an approach was a political necessity because Congress did not want to appear to be headed in a different direction than the President. The return of a divided government with the Democrats regaining control of the House of Representatives may actually move the needle towards tangible progress, he said.

Those expecting any funds to be earmarked for new programs could be disappointed, Ferguson said. Scarce monies will likely be directed toward improving existing infrastructure rather than towards new projects, he explained.

Ferguson is in his second term as a Member of Congress. He sat on the House Transportation & Infrastructure Committee in his first term; he has since moved to the House Ways & Means Committee in the 116th Congress.