Tax indexed to fuel efficiency to replace gas tax?

Link to article here.

Is this a better gas tax idea?
Fri, Feb 19, 2010 | By Rodger Jones
Dallas Morning News

State lawmakers have been scrambling for ways to protect the buying power of the fuel tax even as cars get more efficient and require less gas. The concept under discussion in Austin has been to index the tax so it would automatically rise with inflation or the cost of construction.But that’s looking to be old school even before Austin gets seriously close to acting.

In Virginia, lawmakers are already looking at a newer idea of indexing the gas to the average fuel efficiency of the cars on the road. That’s yet another way to make sure that car owners produce a steady amount of revenue and keep up their per-mile tax support for roadways.

Two transportation guys around here have tossed out this idea too — my colleague Michael Lindenberger wrote about it recently, and Michael Morris, transportation director for the North Central Texas Council of Governments, has made public presentations.

Both Michaels seem to be claiming authorship of the idea — our Michael says he thought about it before he heard about it — and it’s hard to know which one to believe. I do know that both have the attention of transportation officials.

— Our Michael says he was buttonholed the other day by Texas Transportation Commissioner Bill Meadows, who had read the blog item and said the idea is worth pursing.

— Morris laid out details of the concept this month to a joint meeting of the Legislature’s Senate and House transportation committees. Senate Transportation Chairman John Carona asked for details. You could hear the wheels turning.

I have to say Morris has a better pitch. Lindenberger has a treatise. Morris has charts, numbers, a powerpoint and everything. He’s also got a great intro line for elected officials who are sensitive to the “tax friendly” label.

Morris told lawmakers: “If I said there is a strategy to raise taxes that does not cost the consumer any more money, you would say I’m crazy.”

He had their attention. You can see his presentation by clicking up the Feb. hearing on the Legislature’s archives. Dial into 3 hours, 29 minutes and listen. You can also follow his chart while listening (click to pg 10).

I’m not sure I follow how you can cut people’s taxes and make more money, but lots is possible in Austin. One of the Michaels will have to convince me how a fuel efficiency index does magic that an inflation index can’t.

Even so, this campaign year is a tricky time to talk about any kind of new tax. Kay Bailey Hutchison has jumped on Rick Perry because TxDOT is studying the concept of so-called VMT (vehicle miles traveled) tax. That method also could make sure you pay a steady per-mile cost of using roadways, regardless of fuel efficiency. It could be a lot more complicated, potentially with transponders that could have to produce information at car-registration time or perhaps at the gas pump.

But any of the new ways of raising more highway revenue is politically dangerous in an election year. Just look at the answers legislative candidates gave on this newspaper’s voters guide when asked about highway funding.

Whoever goes down to Austin next year will need to confront a long-term funding shortfall estimated at more than $300 billion over 25 years. The status quo isn’t cutting it.

Leave a Reply