Maryland mileage tax a no-go, for now

Originally published in the Washington Examiner

Speed cameras already monitor Marylanders' driving habits. In coming years, the state government could also monitor where and how many miles each Marylander drives.

A Maryland business group, the Greater Baltimore Committee, released a report last week outlining the pros and cons of taxing people by the mile, an idea making the rounds through state capitals around the nation.

At first glance it sounds like a good idea. It even sounds market-oriented since those who use roads more would pay more. But it's the least effective, most complicated and most civil-liberties' violating means to raise more money for state transportation projects.

First, as cigarette taxes show, the higher the state taxes a product, the fewer people buy them. And many of those who still smoke buy them illegally. This eventually leads to less money for the state and higher law enforcement costs. If the main goal is to reduce smoking, lower revenue is a good sign.

In the case of a mileage tax, however, the main goal is to boost revenue not being earned by shrinking revenue from the gasoline tax -- $23.5 cents per gallon in Maryland. Logic says people will find ways to drive less if they are taxed by the mile - and evade detection by tampering with GPS machines tracking their whereabouts.

That means that eliminating the gas tax, the goal of many of these programs, will likely never happen and taxpayers will be left with two taxes instead of one.

Besides, taxing by the mile also does nothing to ensure tax revenue collected will be applied to the most worthy transportation projects, or transportation projects in general. This is a serious problem becausehundreds of millions of dollars have been transferred from Maryland's Transportation Trust Fund over the last decade to balance the budget.

Second, launching a mileage program requires millions of dollars to start as it means buying a GPS for every car in the state and forcing new cars to have them. Oregon estimates it will cost about $35 million to make compatible service stations, where the state plans to collect the tax, and about $1.6 million to administer the program each year.

It would also require a host of decisions about how much to tax per mile; whether to track where or just how many miles a person travels; to track based on time of day or type of miles travelled; and whether gas guzzlers should be taxed at higher rates along with low-occupancy vehicles. Since GPS systems are some of the most stolen items, expect costs to be significantly higher than estimated.

Most importantly, why would Marylanders willingly give the government the right to track their whereabouts? Remember, this is a state whose police spied on nuns and other peace activists and mistakenly put them on a terrorist watch list.

And how far a leap is it for the state to not only track whereabouts, but also control the speed at which a person drives? And would Marylanders still be able to choose the GPS "personality" or would Gov. Martin O'Malley guide Marylanders to their destination with helpful public service announcements along the way?

If the state really wants to generate money for transportation it should first pass legislation to forbid using any Transportation Trust Fund money for other projects. Second, it should eliminate toll booths and add open road tolling with variable pricing on all new road projects to reflect the level of congestion. Rush hour fees, for example, would be higher than those on holidays or mid-day.

Open road toll technology does require drivers to slow down, which has the added benefit of easing congestion. Those with E-Z Pass would be immediately charged, while other drivers would be billed through a look-up of their license plate.

These tolls could be dedicated to maintaining the roads where they are collected. Former U.S. Secretary of Transportation Mary Peters supported this idea. She argued for getting rid of all toll booths and urged Congress to "remove restrictions on tolling on our Interstates and provide states with greater flexibility to implement electronic road pricing."

Despite clear benefits of adding this technology, the $4 billion going to highway projects around the country each month from the stimulus package is designed primarily as a welfare program.

As U.S. Transportation Secretary Ray LaHood said recently, "It's about people. Their livelihood. And their ability to continue contributing to society." If that is the case, Marylanders, and everyone else in the U.S., can expect long toll lines and an ever crumbling highway and bridge system for years to come.

Author Note: My May 29 column, "Freedom is not always fun," mistakenly said that women who work at home have higher life satisfaction than those who work in the marketplace based on the study, "The Paradox of Declining Female Happiness." In fact, those work in the home now show no difference with their peers.I apologize for the error.

Examiner columnist Marta H. Mossburg is a senior fellow at the Maryland Public Policy Institute.