Would You Want to Pay for Driving By the Mile?

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In a bit of controversy for the Obama Administration, US Department of Transportation Secretary Ray LaHood suggested Friday that the new administration might embrace charging motorists a tax for every mile they drive as a way to pay for highway and transit projects. No sooner than Secretary LaHood raised the idea, it was shot down by the White House, according to a story in the Washington Post.

The idea to raise money for transportation projects by a pay-by-the-mile tax scheme has been proposed in the states of Oregon, Rhode Island and Minnesota. North Carolina and Ohio are also considering it.

For example, an Oregon "state task force will look at equipping every new vehicle in Oregon with a Global Positioning System to record every mile driven and where. Motorists would pay at the gas pump based on how much they drove, no matter how fuel-frugal their vehicle," says a story in the Los Angeles Times.

The Post story says, "In 2006, Oregon undertook a pilot project using a mileage-based system. Global Positioning System units were placed in 200 vehicles, and when motorists filled up at gas stations, the electronic units added a fee of 1.2 cents per mile driven." The Oregon study report can be found here.

The UK has been considering pay-by-the-mile since at least 2002. In a 2005 London Guardian story, the government was contemplating a scheme to charge £1.30 a mile on the busiest highways such as the M25 around London, the M1 in the Midlands and the M6 in the north-west of England.

The idea was to implement such a system by around 2014, although things have been quiet lately about the idea. However, a London congestion charge has been in place for several years.

Pay-as-you-drive (PAYD) insurance is starting to catch on in different countries, so it may only be a matter of time before pay-by-the-mile tax catches on as well. You can read more about it here as well.

Any thoughts?

Update (26 Feb 09):

The Wall Street Journal is reporting that the bi-partisan US National Surface Transportation Infrastructure Financing Commission is recommending in a report coming out today that driving be "made a lot more expensive" and that the US government should force the installation of devices in cars "that levy a fee for every mile traveled."

I assume the Commission's report is one reason why Secretary Ray LaHood supported the idea last Friday before it was shot down by the White House.

The interim report that was published in February 2008 can be found here. I'll link to the final when it becomes available (it is here.)

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