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Issue Date: Vol. 53, No. 1, January 2013, Posted On: 1/15/2013

Pay-As-You-Drive Tax Studied In Washington

Hank Schlesinger
TAGS: vending route, amusement route, juke box route, commercial fleets, gas tax, federal gas tax, pay as you drive gas tax, highway maintenance

WASHINGTON -- What you pay at the pump to gas up route vehicles could soon be based on mileage. With highway infrastructure badly in need of repair, Congress is looking at a program that would calculate gasoline tax based on mileage using GPS data loaded into gas pumps.

A pay-as-you-drive levy is not as farfetched as it sounds. Nevada and Oregon have already tested such a program that adjusted fuel prices based on how far a vehicle was driven.

With 4 million miles of highways in need of upkeep at an estimated cost of $123 billion, the program makes sense to many lawmakers desperately seeking funds. The alternative, say proponents, is an across-the-board tax hike that would boost the federal gas tax, which has been stuck at 18.4¢ a gallon (not 18.4%) for two decades. (The Clinton administration's budget package in 1993 raised gas taxes a mere 4.3¢ to 18.4¢ per gallon.)

Proponents of the program point to the fact that, since 2008, Congress has been forced to add $52.8 billion a year to highway maintenance. That could rise to more than $100 billion over the next decade to maintain the nation's highways while states facing budget problems have resorted to "graveling" some rural roads to avoid maintenance costs.

The pay-as-you-drive proposal is one of many revenue sources being examined in Washington as a way to cut the budget deficit.

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