As driving miles decline, a mileage tax may replace Minnesota's gas tax to build and maintain roads
By Bill McAuliffe
Star Tribune | As Minnesota drivers cut back on their mileage, they may be sending the gas tax toward the scrapyard.
Instead, the state might replace it with a new tax on the miles you drive.
That solution probably is still years away, but it's one that policymakers are considering as a way to make up for slippage in the tax proceeds they depend on to build and maintain roads and bridges.
November driving mileage in Minnesota was down 5 percent from November 2007, according to Federal Highway Administration figures released Thursday.
That trend held up for almost all of 2008. Minnesotans' driving mileage declined in 11 of the 12 months ending in November. Only February saw an increase over 2007, and it had an extra day because of Leap Year. November's decline occurred even with gas prices at the lowest point they'd been in four years. In the metro area, Metro Transit saw a ridership increase of 6.1 percent from 2007 to 2008. It's up 17.4 percent over the last four years, to its highest passenger count since 1981.
Gas tax revenues are running about 3 to 5 percent below expectations, despite gas tax increases since April totaling 5.5 cents per gallon.
"What we probably have is 'less more,'" said Kevin Gray, chief financial officer for the Minnesota Department of Transportation, describing an increase in gas tax revenue of about one-half of 1 percent in 2008.
If the trend continues, the gas tax "won't be an adequate source of revenue," said Lee Munnich, a senior fellow and director of the state and local policy at the University of Minnesota's Humphrey Institute. "We have to come up with another way of funding our transportation system."
In 2007, Gov. Tim Pawlenty authorized funding for a study of technologies that might be needed to switch away from a gas sales tax to a miles-driven tax. Oregon has already completed a test project. A federal report due this month is likely to recommend that strategy, Munnich said.
