by Jon Styf
A Tennessee Senate committee heard testimony on Wednesday on a potential mileage-based user fee to replace the state’s gas tax.
Several states have begun pilot programs on what is called an MBUF while Virginia has gone to a permanent model.
Patricia Hendren, Executive Director of the 17-state Eastern Transportation Coalition that includes Tennessee, said the issue is, with more fuel-efficient vehicles and the rise of electric vehicles and hybrids, gas taxes are no longer a tax that equates to a road usage fee.
As Sycamore Institute showed in its recent policy statement on road infrastructure needs and funding, taxes on fuel and registration are the largest funding source for transportation projects in Tennessee. The state currently has a one-year moratorium on personal vehicle registration fees but normally charges $16.75 annually for most vehicles, $100 for electric vehicles and 26 cents per gallon for gasoline along with 27 cents for diesel.
Those fees bring in $1.1 billion annually to the Tennessee Highway Fund. The Tennessee Advisory Commission on Intergovernmental Relations recently reported that the state, one of just six which does not take on debt for road projects, has $34.7 billion of transportation infrastructure needs.
Sycamore Institute noted one state agency estimate said the rise in more fuel-efficient, hybrid, and electric vehicles could decrease the state’s annual transportation revenues by as much as $130 million in 2030.
In 2020, Tennessee spent $2.8 billion on transportation projects with 75 percent of that funding coming from the state.
Late last year, Gov. Bill Lee claimed the state needs $26 billion in funding toward road congestion, with $14 billion for the state’s four major metro areas and $12 billion for rural interstates.
Members of the State Senate Transportation and Safety Committee heard presentations from Hendren and Reason Foundation Senior Managing Director Baruch Feigenbaum, asking questions of the two on issues related to the mileage-based taxes.
Hendren said the new system typically cut costs for rural drivers, who tend to have less fuel-efficient vehicles and therefore pay more gas taxes currently than others. She said a key is having plenty of options on how to report mileage, from phone apps to reporting odometer readings to having the option of paying the average fee for a user with the same vehicle type.
Sen. Frank Niceley, R-Strawberry Fields, said monitoring devices on vehicles continue the narrative that “We’re one nation under surveillance.”
Feigenbaum said, while he is not suggesting a fee, the range is usually 1.5 cents to 2 cents per mile. The fees would be paid monthly through a third-party provider. The taxes would replace the current state gas tax.
Sen. Becky Duncan Massey, R-Knoxville, said she participated in a pilot program for the mileage-based monitors last fall and is open to a pilot program in Tennessee. She noted some issues would have to be addressed, such as a partnership with neighboring states as she said that 30 percent to 40 percent of Tennessee’s current gas tax is paid by out-of-state drivers.
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Jon Styf is an award-winning editor and reporter at The Center Square who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies.
“Patricia Hendren, Executive Director of the 17-state Eastern Transportation Coalition that includes Tennessee, said the issue is, with more fuel-efficient vehicles and the rise of electric vehicles and hybrids, gas taxes are no longer a tax that equates to a road usage fee.”
The issues are:
A)Tennessee already charged us all to create “choice” lanes called HOV lanes – to promote car pooling. Then made them eligible for hybrids, which don’t get better fuel mileage than many gas/diesel vehicles when driven at interstate speeds. The state made the “choice” to promote hybrids (but not true fuel efficiency). The state should not be surprised at the consequences of their hybrid/EV corporate welfare and choosing winners.
B) Tennessee already raised the gas tax. Susan Lynn explained how we just need to buy more groceries to offset the Republican Supermajority gas tax increase. “THE MORE YOU BUY, THE MORE YOU SAVE!!!!”
C) Lockdown Lee and the Republican Supermajority just gave away $800M of our money to Ford to make EVs exclusively – all while they knowingly have a shortfall in transportation infrastructure funding. In effect, pouring gasoline on the fire. Corporate welfare outranks roads for the taxpayer. Again, the state promotes zero fuel vehicles (with our money) and whines about lack of fuel revenue…
“Hendren said the new system typically cut costs for rural drivers, who tend to have less fuel-efficient vehicles and therefore pay more gas taxes currently than others.”
Rural drivers also don’t use the coal-powered EVs, because they typically drive further. A rural car isn’t less fuel efficient because it isn’t sitting at all those insipid red lights in “town” getting zero MPG. The EV lack of range and tow capacity boondoggle won’t work for them. Those Ford trucks are useless as actual trucks. City dwellers get their “free” busses, “free” light rail, “free” e-bikes, “free” charging stations for their federally subsidized, coal-powered cars, and expect country folks to pay for their mileage too?
Look into “15-minute cities” and combine that with GM/Ford/Google (all Tennessee corporate welfare recipients) “virtual power plants” and you will see where this plan is headed.
So, if I take a 1,000 mile round trip, with only 100 miles of it being within Tennessee, I have to pay the State of Tennessee a fee for all 1,000 miles? What a scam!
No. No. No.
This is a way for governments to track your every move, action and eventually thought. This is communism. Period.
This is the stupidest thing I’ve ever heard. I cannot believe that our Senate is actually giving these woke liberals time with this.. People that drive for a living will be hammered with taxes. I am so over this crap! Why do politicians want to punish everyday life?
Nah, simply tax the EVs and hybrids to pay their share.
Believe me this scheme will never work out well for Tenneseans. It sounds to me like part of the globalist scheme to get people off the road. I am SOOOO glad I saw Lee for what he was and never voted for him. People need to start looking at ALL of the candidates including the Independents. You will find the most conservative and constitutional are in the Independent party. You have to sift through and vet them as well but I have found the best candidates there and have voted Independent both times that Lee has run for Governor. Get out of the box folks or we will continue to get more of the same globalists looking to enhance their bank accounts and hoist their career……is Lee looking to go to DC??? Seems that way to me.
This is an attempt to further enslave the People. How about NO
Sounds like a great way to punish rural residents.
SHORT ANSWER
NO NO & HELL NO
states would love this. basically taxing you every time you move.
slavery. servitude.
a prisoner.
a government dream.
to hell with anyone considering this.
When I hear about some tax scheme like this (a Mileage-Based Vehicle Tax), I immediately think, A Periodic Tax Return–like an annual Income Tax Return! I HATE those things! At first, a periodic tax return will probably be quick and easy to complete and file, but in time it will, I assure you, become a ‘monster’ that everyone will dread having to complete and file! But some will say, ‘It is ‘So Fair, Because Everyone Will Pay Only His Fair Share’–where have I heard THAT before? The Democrats will probably ‘love’ it, and the Republicans will probably ‘hate’ it. Democrats will ‘love’ it because, over time, they will be able to add to its complexity with ever newer and more onerous burdens. I say, DON’T DO IT! If Tennessee gasoline taxes are too high, then just REDUCE THEM. Easy ‘peasy’. Republicans, if you do enact such a tax scheme, YOU WILL BE SORRY!
Just because someone else jumps off a bridge doesn’t mean you have to. That’s a significant increase in taxes for most personal vehicles. Frankly it sounds like another “Pilot” gas program that ran a few years ago referred to as “Manuel”
There are far to many financial drains from the State Coffers to warrant any increase in “fees or taxes” Government must learn to live within it’s means. Time to focus on a reduction in expenses.