Market-Friendly VMTs

by Reihan Salam

Recently, Ben Domenech of The Federalist argued that Robert Sarvis, the this year’s Libertarian gubernatorial nominee in Virginia, is a “libertarian-in-name-only” in part because he’s open to the idea of mileage-based user fees as a substitute for motor fuel taxes:

That last position is particularly nonsensical to me: a VMT, which generally requires a government GPS to be installed in your car to track your miles driven, is about the most anti-libertarian transportation tax you can think of – even those radical libertarians at Brookings think it’s a bad idea, and it was one of the potential bad ideas in McDonnell’s transportation plan that got killed over it:  “The biggest concern may be privacy. Eighty-six percent of area commuters would oppose having a GPS device installed in their car to track their miles, according to a study by the Council of Governments Transportation Planning Board released last week.” Big government technocrats may like such steps, but I cannot think of a single coherent libertarian case for such an invasion of individual privacy.

But as Diana Furchtgott-Roth of Economics 21 explains, mileage-based user fees don’t actually require “a government GPS to be installed in your car.” Many fear that the use of GPS-enabled devices to gauge mileage represents a threat to privacy, mileage-based fees can rely on odometers — and of course state governments can give drivers the choice of paying a flat monthly fee in lieu of a mileage-based fee. The Oregon Department of Transportation has done just that in its VMT pilot program. And mileage-based user fees not be administered by the government at all. Rather, governments could outsource the work to independent billing organizations, and these organizations could be legally obligated not to collect location data. There is also an affirmative reason for libertarians might embrace VMTs. Whereas the connection between motor fuel taxes and road usage is increasingly tenuous as drivers shift to more fuel-efficient vehicles, mileage-based user fees can be tailored in such a way that they reflect the extent to which a given driver causes wear-and-tear on infrastructure. As a general rule, user pays pricing is an idea libertarians and market-oriented conservatives have long embraced.