Arkansas Trucking Association

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Up Front- Captain Obvious

 shannonnewton2Shannon Newton
 President, ATA

The fact that America’s infrastructure is crumbling is not in dispute. The hard part? Finding the will to pay more for it.

It’s no surprise. There are few things more contentious in politics and in our national discourse than taxes. States all across the country, and elected representatives in Washington DC are grappling with how to generate enough revenue to support not only current spending but the higher levels needed to make improvements to the system.

Our nation’s roads and bridges are funded by fuel tax—a fuel tax that hasn’t been adjusted to keep pace with inflation in decades.   As receipts dwindle due to increased fuel efficiency, there is palpable pressure to find new, viable road funding mechanisms.

The latest buzzworthy acronym to hit the highway funding symposium circuit as a potential solution is “VMT.”

The vehicle miles traveled tax, also known as a mileage-based fee or road user charge, is a policy of charging motorists based on how many miles they have traveled. It’s a tax, just a new and seemingly different type of tax that doesn’t always have “t-a-x” in the title.

The concept seems logical and typically excites those new to the table discussing the troubles surrounding transportation funding.

However, there are actually a number of very compelling arguments againt a VMT tax. Estimates indicate a VMT system would encounter administrative overhead between 30 to 40 percent, more than even tolling (30 percent). And the technology to gather the data and a government agency to enforce compliance of 250 million American vehicle-owning self-reporting tax-payers just doesn’t exist.

These challenges and others to VMT tax implementation were addressed recently by the Oregon Department of Transportation in a pilot study. These included the efficiency and reliability of the technology required, the cost of fitting vehicle-monitoring equipment, public acceptance and privacy issues.

When the current mechanism isn’t generating the revenue we need, how could this less efficient and more cumbersome method be seriously considered as a viable alternative?

The best option to solve the short-term needs is of course the most obvious, well-known and readily available… the fuel tax.

In 2015, thirteen (13) different states have either passed or are seriously considering implementing fuel tax increases to fund their transportation needs.

The fact is that fuel taxes remain the most cost-efficient method of taxation available. The administrative cost to collect and distribute the fuel tax dollars received is less than 2 percent, meaning that 98 cents of every dollar collected in fuel tax goes back to fund the roads and bridges.

The fuel tax applies efficiently and fairly to all motorists in order to maintain the city streets, county roads, state highways and the interstate system that we depend on to enjoy the standard of living we have become accustomed to.

The fuel tax is not the enemy. Our reluctance to adapt and evolve the tax, to capture present day realities, is to blame. If our vehicles are getting more miles per gallon, we should be paying more tax per gallon, period.

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Arkansas Trucking Association
PO Box 3476 (72203)
1401 West Capitol Ave.
Little Rock, AR 72201

(501) 372-3462 | Phone
(501) 376-1810 | Fax

Our Mission

  • PROTECT the collective interests of trucking companies in the political and regulatory arenas.
  • PROMOTE the dynamics of trucking so that people have a better understanding of the link between America's primary freight delivery system and the standard of living they enjoy.
  • SERVE our members to help them to grow their business and their profits
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