Out of Control Policy Blog

Focus Group Studies Show VMT Systems Have Great Potential

Vehicle-miles-traveled (VMT) fees are a possible successor to the federal gas tax. Current studies are examining the potential qualities and the implementation of VMT systems. Last month a panel at the Transportation Research Board conference concluded that Fairness, Privacy, Administrative Cost, and Enforcement are the most important characteristics for new VMT systems. And while VMT systems have several advantages, their implementation could be challenging. 

Why does the U.S. need a different road funding system? What is wrong with the gas tax? Currently, most federal and state transportation projects are funded by a gasoline tax. The federal gasoline tax is 18.4 cents per gallon; state gas taxes vary from 8 to 48 cents per gallon. Today’s vehicles are more fuel-efficient than ever. And with the increasing number of hybrid vehicles that pay significantly less gas tax and total electric vehicles such as the Nissan Leaf that pay no gas tax, the gas tax is becoming an increasingly poor funding mechanism.

Finding a successor to the gas tax is challenging. The gasoline tax has many advantages. When it is spent on highways, it is a user fee, directly related to the number of miles that a motorist drives. The costs of collection are low at less than ½ of one percent. And evasion is very challenging. There are several possible funding mechanisms available. However the challenge is finding a mechanism that is a true user fee, has a low cost of collection, and is difficult to evade. 

Some of the most relevant information about VMT research came from panelist Richard Baker of the Texas Transportation Institute (TTI) who has studied implementation in Texas. He has documented the state-of-the practice in mileage fees, gathered input and perspectives from both Texan stakeholders and the public, engaged experts to study deployment options, and created several different concepts. 

According to Baker, TTI convened focus groups in Abilene, Corpus Christi, Dallas, Laredo and Yoakum. These groups discussed the basics of transportation and fuel taxes, the concepts of a mileage fee including the technology options and the transition to such a system. The Texas focus groups uncovered a lack of knowledge of transportation funding, a negative reaction to mileage fees and privacy concerns. The rationale for a VMT system has not been adequately explained to the public. Most participants view the fairness issue (i.e. income disparity, geographic differences) as particularly important. Most consumers prefer a pay-at-the-pump system that is low-tech compared to high-tech. 

Baker believes that VMT systems have a lot of potential. Vehicle mileage fees are logical and sustainable and support a pay-for-use principle more effectively than the fuel tax. VMT trials provide valuable demonstrations for how the systems work.

As a result the study recommends testing mileage fees with a pilot using only electric vehicles. This has several advantages. Electric vehicles are a small percentage of the fleet, pay no fuel taxes, and provide a good user group to test. The advantages of implementation on the electric vehicle fleet include testing the full range of privacy, system administration, and enforcement aspects. Electric vehicles have systems than can easily be piggy-backed. The proposed testing system will use odometer readings from vehicle inspections, and an opt-in system that allows discounted of out-of-state mileage with a GPS device. Currently, testing is underway at national commissions, federal research facilities, and state level studies and pilot programs. 

More research can help explain the effectiveness and potential of VMT systems.

Baruch Feigenbaum is Transportation Policy Analyst


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