ANNAPOLIS – After feeling the heat from last year’s gas tax hike, some Marylanders fear another tax increase — one based on how many miles they drive.
Legislation that would tax motorists for every mile they drive was considered by the Maryland Department of Transportation (MDOT) earlier this year.
The potential cost of the tax has some people fighting to get it banned before it is ever implemented. Jessica Cooper, director of the Maryland branch of the National Federation of Independent Business, said the tax would cause small businesses to put the burden of the cost on consumers which would harm the economy.
“This type of a tax would essentially tax people for leaving their homes,” she said. “You are taxing people who move from their homes, which means fewer people are going to be going out to eat or going shopping. The ripple effects could be really damaging.”
Though it was not implemented, it has not been ruled out as a future option as the state looks to generate more revenue to cover transportation projects, according to Erin Henson, public affairs director for MDOT.
“It’s not something we currently see as a viable option…but never say never,” Henson said.
The average American drives somewhere between 10,000 and 12,000 miles every year and more than 90 percent of Maryland drivers are commuters, according to U.S. Census data.
A vehicle miles-traveled tax would implement a flat tax per mile driven. As it was considered by MDOT it would be tacked on to the existing gas tax.
Oregon started an annual pilot program in 2006 for volunteers to participate in the program for one year. The state places a GPS in participants’ vehicles to monitor how many miles they have driven. The participants pay the tax at the gas pump, but they were exempt from the state’s fuel tax. According to the Oregon Department of Transportation, volunteers pay a 1.5 cent charge per mile driven. Thirteen other states have also tried a pilot program.
In February delegate Justin Ready (R-5A) introduced a bill which would have prohibited any vehicle miles-traveled taxes from being passed, but it failed.
Ready said the tax is regressive because it would have an unfair effect on working-class families and workers and little impact on those with higher incomes.
“Marylanders are overtaxed already,” Ready said. “Funds are not being used to help commuters, but to hurt them.”
Opponents of the legislation have also raised privacy concerns because MDOT could require government-mandated GPS devices to track the number of miles motorists are traveling.
“It’s really troubling to consider the government tracking where you drive and where you go,” Ready said. “So I tried to preempt it.”
Cooper called the idea “crazy” and said the tax would harm small businesses.
“This type of tax would have a big negative impact on small businesses,” Cooper said. “A lot of small businesses are delivery businesses or use vehicles to provide their services.”
Although his bill failed to pass, Ready said he is prepared to introduce legislation as many times as it takes to prevent the tax from happening.
“We need to stand firmly against any mandatory tracking for taxation purposes,”Ready said.