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May 19, 2021 10:15 AM, EDT

Industry Rejects Tax Proposal Targeting Trucks

ATA President Chris Spear"If Sen. Cornyn was looking to throw a wrench in our recovery at the worst possible moment, he found the right policy," ATA President Chris Spear says. (Stefani Reynolds/Bloomberg News)

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A Senate proposal to impose a vehicle-miles-traveled fee exclusively on commercial vehicles drew a strong rebuke from the leaders in the trucking industry.

During a May 18 Finance Committee hearing to explore funding solutions for the country’s infrastructure system, Sen. John Cornyn (R-Texas) suggested that lawmakers consider a structure under which a trucks-only transportation fee would be part of a larger program.

“A targeted vehicle-miles-traveled user fee on heavy trucks used in commercial vehicles, along with perhaps some relief on other fees that the trucking industry pays, to me seems like one idea that — while there’s no perfect idea, and there’s also nothing free — we need to come up with something that makes sense,” Cornyn said. “That’s something I appreciate the committee considering.”

The trucking industry strongly opposes a transportation fee that would be exclusive to commercial vehicles, a stance American Trucking Associations President Chris Spear stressed in a statement provided to Transport Topics on May 18.

“It’s really mind boggling that without talking to Texas truckers, a senator from Texas would propose taxing the central and most critical link in the supply chain as the economy tries to climb out of the COVID recession," Spear said. This will have disastrous consequences for our economy, bankrupting small business truckers and killing good-paying trucking jobs across the country while hitting consumers hard with higher prices for gas, food, medicine, and everything else they use and depend on in their daily lives.

Cornyn

"If lawmakers are looking to throw a wrench in our recovery at the worst possible moment, the proposal Senator Cornyn floated would do just that.”

At the ATA Mid-Year Management Session in San Antonio, Spear told Transport Topics he was “shocked and dismayed.”

“We will be taking a very aggressive position against this,” said Spear. “We will work with you but, when you propose something that is this caustic toward our industry, we will fight back. And this is one of those instances.”

Texas Trucking Association also voiced its opposition to the proposal.

“Sen. Cornyn’s vehicle-miles-traveled tax is an assault on the trucking industry and the more than 735,000 hardworking Texans who keep the Texas economy strong,” Texas Trucking Association President John Esparza said in a statement. “To see Sen. Cornyn not only support such an ill-conceived idea, but to take the lead, is completely unacceptable to the thousands of trucking companies and small businesses across Texas that he purports to represent. Infrastructure funding is desperately needed, but not on the back of one industry. That is the essence of a discriminatory tax on the very companies that bring life’s essentials to every Texan.”

John Esparza

Esparza

In a May 19 interview with TT, Esparaza added, “When you begin to single out small sectors of trucking, not just the trucking industry, and try to put a larger burden on them — this is not equitable, and that’s not the American way. It’s not Texan way. It’s certainly not the trucking way.”

Cornyn’s office did not respond to requests for comment.

This year, transportation policymakers on Capitol Hill have been debating infrastructure funding policies as they aim to advance comprehensive legislation. With many policymakers continuing to oppose raising the federal fuel tax, the adoption of a VMT system has been viewed by some as an alternative for funding highway projects over the coming years.

Critics of VMTs note potential privacy violations via the use of tracking devices on vehicles. Under a typical VMT system, fees from motorists would be collected periodically to help pay for highway and infrastructure programs.

ATRI Practical Analysis of ... by Transport Topics

In March, a report from the American Transportation Research Institute titled “A Practical Analysis of a National VMT Tax System” examined the system for levying a per-mile charge on drivers. ATRI determined administrative costs of a national VMT would represent a more complicated scenario than costs associated with mechanisms such as the federal fuel tax.

Revenue from federal gas and diesel taxes is insufficient to meet the Highway Trust Fund’s long-term obligations. The fund, which is headed toward insolvency, is used primarily to assist states with highway projects. Congress approved the fuel tax rate in 1993.

Associate News Editor Dan Ronan contributed to this report.

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