Ohio to study per-mile driving tax with $2M federal grant

The grant from the Federal Highway Administration will help “gather data for a major public outreach program” on a vehicle miles traveled tax.

Ohioans could soon be taxed for every mile they drive, depending on the results of a new federally funded study in the Buckeye State.

In March, the Federal Highway Administration, or FHWA, awarded $18.7 million in grants to eight projects around the country – including $2 million to the Ohio Department of Transportation, or ODOT.

The funds are intended to study the feasibility of a vehicle miles traveled tax, or VMT – a type of road user fee that is levied on drivers based the number of miles driven. The ODOT received the $2 million grant in order to “gather data for a major public outreach program” on a VMT tax.

Additionally, the FHWA is working on a feasibility study, primarily on “how a potential national pilot mileage-based user fee system could even, if at all, be carried out,” a spokesperson told Engineering News-Record.

Ohio lawmakers already increased in 2019 the state gas tax by 10.5 cents, raising it to 38.5 cents per gallon from 28 cents. The state’s diesel tax was increased by 19 cents, to 47 cents per gallon. As traffic volume in 2020 fell by 15.5%, according to ODOT, so did revenue from gas taxes.

While the study, in its current form, does not involve developing a pilot program, the idea is being floated as a new source of revenue for governments strapped for funds. State budgets have long relied on motor-fuel taxes while the fuel efficiency has increased, and the popularity of electric and hybrid cars grows – prompting a revenue shortfall in the system.

VMT tax proposals have often drawn the ire of drivers, which is one reason why the FHWA may be looking to allocate funds to state governments to fund public outreach programs on the issue.

In Illinois in 2019, one lawmaker proposed a bill to create a VMT pilot program––sparking intense statewide backlash, leading the lawmaker to pull the bill a week later.

With Ohio drivers facing layers of taxes everywhere the shop and live, especially at the pump already, aversion to a VMT tax is understandable.

State lawmakers should instead be looking to ease tax burdens by allowing Ohioans to keep more of their hard-earned money – especially after the year many have had.