Montana's Congressman, Denny Rehberg, strongly criticized a proposal to impose a tax on drivers based on how many miles they drive. The plan, which is a key part of President Obama's proposed "Transportation Opportunities Act," was originally explored by the Congressional Budget Office (CBO) last month. The CBO report also supported taxing drivers based on miles driven.
"This is the sort of half-baked idea that has folks in Montana so frustrated with their government, and I can't say I blame them," said Rehberg. "Not only does a requirement to report miles driven to the IRS raise serious privacy concerns, but any tax on mileage is going to disproportionately burden massive states like Montana while letting places like New York City almost entirely off the hook. This President and his allies in Congress don't seem to get that many people in this country choose not to live in big cities. We prefer open spaces and room to breathe. And we shouldn't be punished for that choice."
In its report, the CBO suggests keeping track of driving by installing electronic equipment in each car to determine how many miles were driven. Then, that information would be transmitted to the gas pump and the tax would be automatically assessed at filling stations. This would effectively make a gallon of gas more expensive for a car with better gas mileage.
In his letter, Rehberg points out that Montana has more than 69,567 miles of national and state highways. Additionally, because the state is less crowded, driving a mile in Montana is much different than driving a mile in downtown New York. Despite this, both drivers would pay the same tax for that mile.
"When I deliver wheat to one of my local elevators, I average 300 to 400 miles per day per truck," said MGGA President Gordon Stoner, who farms in northeastern Montana. "This additional tax and expense on my business operation is simply unacceptable."
The full letter is below:
Dear Chairman Mica and Ranking Member Rahall:
I write in regards to the Transportation and Infrastructure Committee's pending legislation to reauthorize the highway bill and, specifically, President Obama's recently unveiled mechanism to tax drivers on a per-mile basis. A mileage tax unfairly targets rural states, which stand to lose if such a deal were successfully negotiated.
Rural states, with geographically expansive territories and much smaller populations, face unique transportation funding challenges. Together, these obstacles create an environment where mileage taxes aren't feasible. Our agriculture, natural resources and energy industries rely on a strong highway system to deliver their products from source to domestic and international markets. In a state like Montana, however, the source is oftentimes hundreds of miles from the nearest shipping terminal. The same can be said for Montana families, who would pay substantially more every time they visit the grocery store or have a medical appointment.
The forthcoming transportation bill should recognize that many of the alternative and innovative financing mechanisms likely to be included in the new legislation are not viable options in rural areas. And while I realize that funding shortfalls exist and that Montanans must pay their fair share, increasing taxes on rural Americans during an economic recession is not the right way to fix our nation's transportation problems.
When you consider that Montana has more than 69,567 miles of national and state highways, it's clear that our state would be significantly disadvantaged by the President's proposal. A one-size-fits-all approach will not work in Montana, and I urge the Committee to reject any tax on rural America.