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Lawmaker: Use Postal Service to test vehicle-miles-traveled fee

Missouri Rep. Sam Graves says agency can be ‘national testbed’ for plan aimed at replacing gas tax

Fix mail delivery issues first, then look at parcel, attorneys general demand (Photo: Jim Allen/FreightWaves)

One of the strongest voices in Congress calling for replacing the gas tax with a vehicle-miles-traveled (VMT) user fee is proposing the U.S. Postal Service as the place to test the idea.

“The final step necessary to begin a full conversion to a VMT system is to test it in an interoperable, national setting,” Rep. Sam Graves, R-Missouri and ranking member of the House Transportation & Infrastructure Committee, said in a statement Friday.

“The USPS operates a large, nationwide fleet of vehicles that covers the spectrum from our most densely populated cities to every corner of rural America. We need a national testbed for VMT, and this could provide an ideal opportunity to test a much-needed replacement for the obsolete gas tax that we rely on to build our roads and bridges.”

Graves’ proposal comes as Congress gets ready to draw up a long-awaited infrastructure plan and a reauthorization of a long-term highway funding bill. Crucial to the package will be negotiating how to pay for it.

“Ranking Member Graves believes that ultimately all the current user fees that go into the Highway Trust Fund [HTF] should be replaced with a VMT,” a committee spokesman told FreightWaves. “In his Republican highway bill last Congress, the STARTER Act, a provision in it provided for a national VMT pilot, with the view that after that pilot, we then begin the transition. He continues to support this concept.”

Also open to the concept is U.S. Department of Transportation Secretary Pete Buttigieg. During his confirmation hearing in January, Buttigieg told lawmakers that eventually replacing fuel taxes with a VMT “is going to have to be a conversation not only in the administration but with Congress too.”

Graves did not specify whether his plan would involve the Postal Service’s current fleet or new fuel-efficient delivery vehicles that will be replacing them. The agency announced in February that defense contractor Oshkosh Truck Corp. (NYSE: OSK) had won a contract to build the next-generation vehicles, with plans to deliver 50,000 to 165,000 to the agency over 10 years beginning in 2023.

Graves noted, however, that because the agency’s new fleet will reduce fuel consumption, “it will also reduce the amount of revenues generated for fixing the Nation’s roads and bridges. This continued shift toward electrification further underscores the need to eliminate the gas tax and diesel tax for all drivers in the United States and replace those taxes with a VMT user fee.”

A VMT fee could be applied by either levying a flat fee per VMT or by developing a tracking system – for trucks, through an electronic logging device – with different rates for different locations. The non-profit Tax Foundation noted that a flat fee per mile based on vehicle weight measured by the odometer would be the simplest version of a VMT tax to administer. Odometer readings could be done at yearly inspections or by installing an on-board-unit that electronically transmits VMT to a central computer.

Those opposed to using a VMT to replace fuel taxes in the next highway bill — which includes the American Trucking Associations (ATA) — contend that it will require at least a decade to generate revenue because the technology required for it is not yet developed. ATA also has asserted that while it is open to discussing the idea, data privacy and security issues must still be addressed. The group supports raising the gas tax instead.

Tax experts say that because fuel taxes were not indexed to keep up with inflation when they were last increased in 1993 (to 22.4 cents a gallon for diesel and 18.4 cents a gallon for gasoline) and because vehicle fuel efficiency has improved, the tax has lost over 40% of its purchasing power.

“The Highway Trust Fund continues to lose more and more revenue because not all users are paying their fair share given increased fuel efficiency and electric vehicle technology,” Graves said. “We’ve seen enormous progress at the state and regional level, where multiple pilot programs for VMT systems and alternative revenue collection programs have demonstrated success. It’s time to move this solution toward reality.”

The Postal Service did not immediately respond to a request for comment on Graves’ proposal.

Click for more FreightWaves articles by John Gallagher.

One Comment

  1. Stephen Webster

    I agree that we have fleet of trucks and vans. Put gps units in older ones that we plan to keep for man than 3 years and all the new units. Provide funding for the program plus pay the post office $5 per day per unit for a 3 year test. Also the Fed gov should provide 40 percent of the cost of new electric trucks and 25 percent of the cost of hybrid or natural gas or fuel cell equipped trucks purchased in the next 3 years and compare emissions and cost of operations fot the post office only.

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John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.