A vehicle-miles-traveled program also would help close the yawning gap in federal highway funding that is estimated to be as high as $16 billion this year. That’s because the Highway Trust Fund, which pays for roadway and transit systems, is financed primarily through the federal gas tax, currently 18.4 cent-per-gallon. That only brings in $34 billion per year while federal spending has topped $50 billion annually and has had to be supported by transfers from the general fund.

Last year, Highway Trust Fund receipts from the gas tax were down 9.4% over the previous fiscal year due to a reduction in driving because of the pandemic. The gas tax has not been raised since 1993, and there is little appetite in Washington for increasing it. The push for plug-in cars is an additional complicating factor because fully electric vehicle drivers do not pay any gas tax. Several carmakers have pledged to produce all-electric fleets by the end of the current decade.

Pain at the Pump
“The President’s made a commitment that this administration will not raise taxes on people making less than $400,000 a year,” Buttigieg said during an appearance on Bloomberg Radio’s “Sound On” show. “And so that rules out approaches like the old fashioned gas tax.”

During Buttigieg’s Senate confirmation hearing in January, he was asked how the administration would pay for an infrastructure program and mentioned a per-mile fee as one option.

“If we are committed to the idea of user pays, part of how you might do that is vehicle miles traveled,” he said. “But that raises concerns about privacy and there remains some technological questions.”

Washington has been mostly spinning its wheels on infrastructure spending for half the past decade, due in part to a reluctance to raise gas taxes.

A five-year, $305 billion transportation funding law was set to expire in 2020 but was extended until next year. The House passed a five-year, $494 billion surface transportation bill in July 2020, but the measure was not been approved by the Senate.

Greg Regan, president of the AFL-CIO’s Transportation Trades Department, said there is “more political will” for the Biden administration’s push for a robust infrastructure bill and there’s growing interest in an alternative to the gas tax.

“It’s a user-fee model that encapsulates electric vehicles, so it’s perhaps more equitable than the gas tax,” he said. “The headwinds haven’t changed. There’s still privacy concerns, but it’s not like isn’t being done in various states around the country. There are models that work.”

Phased In
Regan said any mileage fee program that’s included in Biden’s infrastructure bill will likely have to be phased in after another infusion of cash from other areas of the federal budget for the beleaguered Highway Trust Fund.