Technology stalls Minnesota's statewide mileage tax idea

The idea intrigued Kathy Gillen: Pay highway taxes by the mile instead of the gallon.

So the Otsego, Minn., resident signed on for one of the nation's largest experiments to test how a state might keep track of miles a vehicle is driven.

But the technology wasn't quite up to the task.

"It counted twice a couple of times, and didn't count at all a bunch of times," Gillen recalled.

The recent experiment involving 500 drivers in the region reflects a desire by state officials to find an alternative to the gasoline tax, a highway funding powerhouse that's likely to diminish as cars become more fuel-efficient.

The results, however, suggest that mileage fees face a long, bumpy road to becoming reality.

The smartphone technology installed in the volunteers' cars failed in about a third of the trips. Weak GPS signals caused problems. Double-counted miles were a frequent problem — in one case a vehicle was recorded traveling 57 percent farther than its odometer showed it did.

"Participants frequently reported that elements of the process would not be acceptable if this was not a test," the study concluded.

"I think software guys would have their hands full here for a while," said Cory Johnson, who managed the test for the Minnesota Department of Transportation (MnDOT). "They have a lot of work to do."

Facing a looming shortfall in highway funding, the Legislature in 2007 decided to spend up to $5 million on the mileage study. It took 13 months and was completed in February. The House is likely to hold hearings on the findings this spring, said Rep. Frank Hornstein, DFL-Minneapolis, chair of the Transportation Finance Committee, who favored studying the idea.

Hornstein expressed confidence that the technological hurdles can be overcome. As for this year, "There won't be a mileage-based user fee in the transportation bill," he said.

Researchers called 15,000 people and randomly chose 500 volunteers. They wanted to study rural and urban driving and chose mostly people who lived in Wright County because it was the rural area with the most people commuting into five metro-area counties.

The fees showed up on monthly invoices sent to drivers based on data recorded via the smartphones. Mileage fees for the study were intended only to replace the current gasoline tax on a vehicle with average fuel efficiency.

"If I were to go downtown for a Wild game, my rate would change as I got progressively closer," said Jim Lanes, 52, of Silver Creek Township in Wright County.

The legislation creating the study kept participants' names nonpublic over concerns about the privacy of their driving habits. But several accepted invitations to talk with the Star Tribune.

Lanes lives in a rural area near Annandale. He said when he left for his job in Monticello, Minn., he'd sometimes drive 5 or 6 miles before his smartphone picked up a GPS signal to log miles.

"I don't know how they would validate that people are using the GPS all the time," he said.

Others found that the state smartphone often came unplugged. "At one point it was unplugged for three weeks," said Betsy Hodge, 40, of Hanover.

"It helped if you were a geek and liked this kind of stuff," said Rep. Mike Beard, R-Shakopee, ranking Republican on the House Transportation Finance Committee, who participated in the study. "Until technology changes so much that it's automatically built into the car, I don't think it's going to happen."

MnDOT learned that it would need to spend time and money correcting billing errors if a mileage tax were levied.

"We're used to building roads," said Johnson. "MnDOT doesn't have an individual customer service approach."

Hodge isn't sure correcting errors will satisfy the general driving public.

But even some critics gave the Legislature and MnDOT credit for conducting the study on the potential of mileage fees.

"It could eventually work if you can get some of the glitches worked out," Hodge said.

Gillen said MnDOT deserved "huge applause ... for trying to plan ahead. Right now, the technology is just not where it needs to be to make it work."

The fear that drivers concerned about privacy would be unwilling to let government track trips proved overblown.

"Sharing private data was not the issue in their minds," the study concluded. "They were concerned about the ability of the state to secure and protect this information from others with harmful intentions."

"I'm shocked at the level of data they shared," he said of drivers in the study.