The VMT a.k.a. Vehicle Mile Tax

When driving through a new residential development, you seldom see or think about what makes a development even possible. Miles of water and sewer pipes, natural gas pipes, electric lines and naturally, roads run through the development. Of course, we need a multitude of interstates, expressways and local roads just to get to the residential development roads. We may take it for granted, but this is basic infrastructure 101.

Just after World War II, the United States got busy building infrastructure. The most obvious was the interstate highways. Communities boomed. Politicians have always understood that infrastructure, roads, highways, water, sewer, natural gas and electricity are essential to economic growth.

In 1956, the Highway Trust Fund was established to pay for the nation’s new interstate system by taxing fuel at 3-cents per gallon.

Over the years, the Highway Trust Fund has worked exceptionally well. It’s is hard to imagine the contemporary bus and motorcoach industry absent our modern interstate system. Currently, the fuel tax on a gallon of diesel is 24.4-cents. Most bus operations claim the partial exemption of 17-cents per gallon of diesel; resulting in the typical over-the-road bus paying 7.4-cents per gallon.

Unfortunately, the Highway Trust Fund that has served us well for over six decades has been running out of money and has required subsidies from general revenue to shore up the account. Why the shortfall? Improved fuel-mileage, people driving less, public transit subsidies, alternative fuels and electric automobiles have all contributed to reducing the revenues.

As of October 2018, cumulative sales of all electric plug-in vehicles reached one million units. Anticipating this trend will continue, Congress has quietly discussed a vehicle mileage tax or VMT. The VMT would basically “level the playing field,” considering every vehicle on the road would pay for every mile traveled.

There is opposition to a federal VMT, usually centered on privacy issues. Using some type of monitoring system or GPS, most folks have little interest in the federal government knowing everywhere they’ve traveled and how fast they got there.

Also, known in D.C. circles as devolution, many believe the federal government should get out of the highway infrastructure business altogether and let the states take care of infrastructure.

As a former developer, President Trump understands the role of infrastructure. You cannot build skyscrapers and golf resorts without it. With Democrats having gained control of the House, it is thought by many that an infrastructure bill is one of those areas in which the two can work together and predict negotiations will begin in earnest very soon.

What are you thinking? We need roads, highways and other infrastructure for our businesses. Infrastructure is paid for with taxes. Should the bus and motorcoach industry continue to enjoy a partial or full exemption from taxes paid into a Highway Trust Fund? Now is the time to speak up.

Let’s use an abundant amount of caution as we discuss where the industry should be when it come to VMT.

These issues and more will be discussed at UMA Motorcoach Expo in Ft. Lauderdale. Your UMA Board members in your region need to hear from you. Let them know your thoughts and ideas.

Share this post