By Vernon Robison
Moapa Valley Progress
The State of Nevada is currently looking at the possibility of instituting a tax based on the miles that a vehicle travels along state roadways to replace the per gallon tax on fuel that is currently in effect. The Nevada Department of Transportation (NDOT) is currently in the second phase of a comprehensive study that is looking into alternatives to more adequately meet the future transportation needs of the state.
“The gas tax was last updated back in 1992,” said NDOT Southern Nevada Deputy Director Rudy Malfabon in a presentation to the Moapa Valley Town Advisory Board (MVTAB) on September 14. “Since that time we have seen a lot more efficient vehicles which have dramatically less gas usage.”
Malfabon explained that high efficiency hybrids and electric car technologies have brought a sharp decrease in tax revenues for transportation infrastructure. These vehicles pay ever fewer, if any, fuel taxes for the use of public roads but they continue to use the roads all the same, putting on wear and tear to the state system and causing more erosion of highway revenues, Malfabon said.
“These vehicles are beneficial for the environment and they bring less reliance on foreign oil which is definitely a good thing,” Malfabon said. “But they also bring less revenues for maintenance of our State’s roads and bridges.”
Malfabon said that the proposal being studied is a Vehicle Miles Travelled (VMT) system. One idea would have vehicles fitted with a device that measures the miles driven on the vehicle since its last visit to a service station. Another device at the service station would take a reading of those miles and add an appropriate tax onto the fuel bill.
Malfabon emphasized that, if a VMT tax were instituted, the current gas tax would be rolled back and the VMT would replace it.
“You’d be paying 50 cents less per gallon for gas, but you’d have the VMT tax added on instead,” he said.
MVTAB members expressed concern about the impact the proposal might have to local residents who tend to do a lot of commuting.
“We live in a rural community and a lot of us put 50-60 thousand miles on our vehicles each year,” said MVTAB member Gene Houston. “We will definitely feel the brunt of this.”
But Malfabon explained that the cost to drivers in the VMT program was meant to remain similar to what it is now.
“We are trying to make the model revenue neutral,” Malfabon said. “Right now you pay about 54 cents per gallon at the pump in federal, state and county taxes. If you are driving the average car that gets about 20 miles per gallon you are paying around 2.63 cents per mile. If your car is less efficient then you pay more than that. If it is more efficient then you might pay less. By comparison, the VMT rate being studied is around 2.60 cents per mile.”
MVTAB member Dustin Nelson said that the program appeared to be penalizing fuel efficiency.
“The federal government has been pushing us to drive more fuel efficient vehicles,” Nelson said. “They have put regulation into effect to require the production of more fuel efficient vehicles. But then this comes around and punishes us for being more efficient. Seems a little strange.”
Malfabon agreed that the overall policy goal of the federal government has tended toward using less fossil fuels and reducing dependence on foreign oil.
“But that doesn’t change the backlog we have of bridges and highways that need attention,” he said. “The government doesn’t want to raise taxes. We haven’t seen a change in the gas tax since 1993 so inflation has eaten away about 50% of the value of those gas tax dollars over the years. And high efficiency vehicles is cutting into those revenues even further. It is a problem that we will have to deal with eventually.”
Malfabon was asked when such a program would be implemented. He responded that it would probably not be anytime real soon.
“There are a lot of questions about implementing such a system,” Malfabon said. “We, in Nevada, are a tourism-centered economy so there are a lot of issues dealing with interstate travel that would have to be resolved. In the end we will need federal leadership and need to have the states implement something that will work in coordination together. That will most likely take ten years or more.”
Meanwhile, NDOT is doing its study to explore what the issues are that are unique to the State.
“That way when the feds come with a proposal, we will have the answers and we will know what will work for our state. We won’t just be having them dictate something to us that won’t work here.”
NDOT is currently in the second phase of the study. The first phase was to examining the idea of a VMT system and listening to public comment about such an idea.
“We found that a big issue that people had was privacy,” Malfabon said. “They don’t want to be spied on in their vehicle. But these devices only measure mileage, they don’t collect any information about location or where you travelled.”
Phase two of the study has been looking into how to best monitor VMT and collect the revenue. A pilot program has been put into effect where people willing to be test subjects have allowed a device to be installed on their car. They then must refuel at specific Las Vegas gas stations that have agreed to participate in the study.
Other methods of collection are also being investigated such as monitoring vehicle mileage over time and sending out a monthly or quarterly tax bill; or requiring a mileage reading during an annual smog inspection and charging the tax annually, Malfabon said.
The third phase of the study would follow up on these various pilot programs being studied and present final recommendations for the program.
“Throughout this process we welcome comments from the public,” Malfabon said. “We want to know what people think about it.”
Information about the VMT study can be found by going to www.nevadadot.com and clicking on the “VMT Study” icon on the bottom of the page. Public comment and feedback can be submitted via email to mvtfeestudy@vmtfeenv.com.
