How a Mileage Tax Would Work
Drivers on the Kennedy Expressway in Chicago.
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Changing the way we fund infrastructure, roads, and bridges in this state is a long running discussion, but it appears a mileage tax may be getting more momentum than in previous years.
A pilot program for a mileage tax is advancing through the Senate, backed by Senate Transportation Committee chair Sen. Ram Villivalam (D-Chicago) and the powerful Local 150 Operating Engineers union.
There’s been some coverage of the proposal out there, but there are many questions left, so we asked Marc Poulos, Executive Director of the Local 150 Operating Engineers, for more details.
He says the system of paying motor fuel taxes has become obsolete.
“There's a class of vehicles that are still paying into the system, that being the fossil fuels, that are getting a certain miles per gallon. And then there's a whole class of vehicles that pay nothing, right? Which is the electric vehicle class,” he said. “They pay nothing they don't get they don't fill up with motor fuels. There's no tax on charging stations where they charge up. There's no tax or user fee on the on the other than their electrical usage of the charger at home. We've tried to adjust, incrementally, the registration fees on electric vehicles to make up the delta. We've been unsuccessful with that. Why don't we just change the unit of measurement and then base people's user fees off of that?”
Poulos says the long term vision wouldn’t be to eliminate the state motor fuel tax at the pump, currently at 47¢ per gallon, but also not to double-charge drivers.
He says drivers would have options how to pay a mileage tax, whether to pay a base rate for a year, to send photos of odometers, or to potentially track mileage with an app, similar to what some car insurance companies use.
“It's then going to know by the amount of miles that I drove this month, because it checks in on the first day of the month and checks out at the last day of the month on the computer. It then measures the amount of miles I drove [and] tells me how many gallons of fuel I would have filled up times the motor fuel tax, and it would say how much I've already paid into the system,” he said. “Assuming that the road usage charge is a couple bucks more than what I would have paid in motor fuel taxes, then I'm going to owe 2 or 3 bucks or ten bucks or 30 bucks, whatever the delta is between the road user charge and motor fuel check. So then I'm only paying one time. That's smart.”
But taxpayer watchdogs say they have concerns over the need for more tax revenue and the security of personal data.
Bryce Hill, Director of Fiscal and Economic Analysis of the Illinois Policy Institute, cited how much more the state is bringing in via the Motor Fuels Tax than before a 2019 infrastructure bill.
“I think it's hard for many Illinoisans to see proposals like this as something other than a cash grab, really, because of the changes that have happened recently,” he said. “In 2020, the Motor Fuels Ta was doubled, the state's bringing in more revenue than ever before and significantly more than just a few years ago. So to pose it as an argument or discussion about what the best way to fund the system and if it's sustainable doesn't necessarily seem to jive with recent history in terms of what's happened with the motor fuels tax.”
The 2019 MFT increase was to pay for a $45 billion infrastructure package.
Hill also pointed to privacy.
“I think there are some serious issues about privacy and how that data could potentially be used,” he said. “And I think oftentimes we hear taxpayers cite those concerns about putting something like a transponder or or taxing vehicle mileage, things like that. So I think there are legitimate concerns that they have.”
But Poulos said there would be options for people who don’t want to share mileage data with the state.
“If that is truly and honestly the number one priority concern of yours, then you are likely to choose the least invasive model, which is ‘send me a bill.' I'm not interested in your nonsense. Right?’ he said. “So you make that choice or you say, listen, I'm not interested in getting double dipped here and getting dinged twice, but I will sign up for the model where I get to take a picture of my odometer at the beginning of the month, upload it, and take a picture at the end of the month and upload it. And then my information from my vehicle is already in the portal.”
The initial legislation is a pilot program for 1,000 volunteers. The legislation is still awaiting action in the Senate Transportation committee.
