Kuhl Conducts Road User Charge Tax Study in North Carolina

Tuesday, October 7, 2008
The News-Observer

Two hundred Triangle drivers will be recruited this fall to road-test a satellite-technology system that might be used one day to collect highway taxes on every mile we drive -- replacing the gas tax on every gallon we buy.

Computers mounted in volunteers' cars will use global positioning system tracking to count the miles -- even across state lines.

Participants will receive make-believe state and federal tax bills for their miles. For their time and their opinions, they'll be paid $895 in real money.

The $16.5 million Road User Charge Study will enlist drivers in six states to determine whether the technology works, and whether Americans would accept a new mileage tax. Volunteers will be asked how they feel about technology that collects information about their driving.

The federal government and 15 states, including North Carolina, are paying for the study to find a fair, reliable revenue source that can keep pace with growing transportation needs.

"The gas tax is not going to be a viable way of funding our highways in the future," Jon Kuhl, a University of Iowa professor who is directing the study, said in an interview. "The national Highway Trust Fund is already going broke, and the situation is going to get worse."

Gas tax collections are slowing as cars get more miles on each gallon, and as $4 pump prices force Americans to reduce their driving. A few years from now, many Americans might be driving plug-in electric and fuel-cell cars that don't use gas at all.

Michael Walden, an economist at N.C. State University, said the study will help Americans answer hard questions about how to pay for the nation's transportation infrastructure. He agreed with Kuhl that the nation needs to find a replacement for the gas tax.

"Perhaps a better way in terms of assessing someone's use of the roads is not how many gallons they use but how many miles they actually drive," said Walden, who is not involved in the study. "A mileage tax could be adjusted over time, as the cost of road construction goes up."

With the $895 bounty and an advertising campaign that will start next week, Kuhl and his team hope to enlist a diverse mix of car owners from the six-county Triangle area. Details are available by phone at 866-363-1975 (toll-free) or online at www.roaduserstudy.org.

After the participants are chosen and trained, their cars will be outfitted with GPS computers -- the satellite technology that drives popular dashboard navigation gadgets. Over eight months, starting in December, the car's computer will record the number of miles driven in each state, then upload the information to a central billing system.

Make-believe taxes

Cars will have make-believe per-mile tax rates based on their EPA-estimated fuel economy.

The tax rates are intended to generate about the same taxes on miles that the car pays in taxes on gallons of gas. The mileage tax would be higher for a heavy truck that burns a lot of gas, and lower for a fuel-thrifty hybrid.

A typical car rated at 24 miles per gallon will have a make-believe federal tax rate of 0.8 cents per mile, plus 1.3 cents per mile for the North Carolina tax, Kuhl said. For 24 miles, that's 31.2 cents state and 19.2 cents federal tax -- about a penny more than the current taxes on a gallon.

If the technology works, it could give federal, state and even local governments the option to set different tax rates for different vehicles.

Volunteers also will test of public attitudes about a new type of tax -- and about technology that gathers information about where people drive.

"Privacy is a hot-button issue," Kuhl said. "People rightly have a knee-jerk reaction about being tracked."

The system will only count the number of miles driven each month in a given state, he said.

"There's no way these units could be used to track people or determine they were in a particular place at a particular time," Kuhl said.

Some drivers will worry about government snooping, Walden said, and that could make it even harder to sell the idea of a new tax.

"I don't know if the mileage tax is going to be any better accepted than the gas tax, but I know we have a problem finding money for our roads," Walden said.