Throughout the country, individual states and multistate coalitions are testing the viability of using per-mile charging to replace the state gas taxes drivers pay. With electric vehicles not having to pay fuel taxes and the improved fuel efficiency of many cars and trucks, states need a reliable funding source to build and maintain roads and bridges. More than 30 states have now taken part in mileage-based user-fee pilot programs. Four states—Hawaii, Oregon, Utah, and Virginia—have established permanent mileage-based user fee programs.
Generally, mileage-based user fee researchers have recommended that any program meet several basic principles as states look for viable alternatives to gas taxes. First, mileage-based user fees (MBUFs) should replace existing fuel taxes, not supplement them. If drivers believe that MBUFs are just an attempt to extract more revenue from them, the concept is unlikely to get off the ground. Mileage-based user fees should be viewed as a way to replace fuel taxes.
Second, while MBUFs could be used in urban areas for congestion pricing down the line, that is a potential option separate from the core purpose of replacing fuel taxes. Creating any unnecessarily complicated and expensive congested pricing program in the short term will likely reduce public trust as drivers learn about MBUFs and how they work.
Third, states need a reliable funding source to maintain and repair roads and bridges. MBUFs were never intended to solve other political or policy goals. Politicians and policymakers interested in policies aimed at reducing overall vehicle miles traveled, eliminating racial injustice, obliterating the so-called ‘patriarchal transportation system,’ or other goals should try to do so separate from the funding mechanism for maintaining roads.
The advantage of having 50 states serve as laboratories of democracy by testing different versions of MBUFs is that some may create innovative programs such as Virginia’s Mileage Choice Program, which encourages users of fuel-efficient vehicles getting 25 miles per gallon or higher and electric vehicles to opt-in to an MBUF option rather than pay a flat annual highway use fee based on a vehicle’s fuel efficiency rating. In Virginia, drivers never pay more than they would with a fuel tax or highway use fee. The highway use fee for a given vehicle is equivalent to driving 11,600 miles under the Mileage Choice Program, so those who participate in Virginia’s MBUF program and drive fewer than 11,600 miles per year will pay less than they would with the flat fee alternative. The program may need some tweaks, but it has proven very popular among drivers. Virginia operates the largest permanent MBUF program in the country, with almost 20,000 enrolled drivers.
The disadvantage of having 50 states designing their own MBUF programs is that some will launch MBUF programs that create more problems than they solve. Washington state, for example, has been testing MBUFs (or road usage charges, RUCs, as the state calls it) for 10 years.
The Washington State Transportation Commission has overseen some best-in-the-nation research on transportation communications and outreach. Unfortunately, Washington’s plan to develop a permanent road user charge is in danger of getting hijacked by special interests and poor policy.
Washington’s proposed approach has three problems.
First, influential interest groups such as the Climate Alliance for Jobs and Clean Energy are exerting political pressure to create their versions of an equitable road user charge. RUCs are already more equitable than the fuel taxes they replace. Drivers pay the charge based on how far they drive, not the fuel efficiency of their vehicles. So lower-income residents in urban and rural areas who tend to own older, less fuel-efficient vehicles who drive less are likely to pay a smaller share of the total while wealthier drivers of newer, more fuel-efficient vehicles in suburban areas will pay more. But the alliance has a different definition of equity, wanting to divert revenue away from the roads the RUC is supposed to fund to pay for walking, biking and transit projects.
The alliance also wants to set a progressive rate structure to address what it views as damage inflicted by roadways on the environment. It is unclear who would pay more, but given that Washington state has set a 2035 goal for all new vehicles to be zero-emission vehicles, many climate goals have already been addressed.
Social engineering is unrelated to finding a new revenue source to build and maintain roads. In Seattle, commuters can reach eight times as many jobs by automobile as they can by transit, and it is essential for the region to continue to build and maintain this vital infrastructure.
Other transportation organizations in Washington are also pushing for road user charges to be used to further goals that have nothing to do with maintaining the roads drivers are paying for.
For example, the Puget Sound Regional Council, the region’s metropolitan planning organization, recommends spending approximately 20% of all RUC revenue on transit projects. The Washington State Constitution’s 18th Amendment requires that all fuel tax proceeds be spent on roadways. Siphoning off 20% of RUC revenue to non-highway purposes would be a significant policy change and undermine the RUC’s status as a true user fee rather than a general tax.
Second, the Washington State Department of Transportation (WSDOT) wants to push drivers into the deep end immediately rather than using an incremental approach to implementing road user charges. Washington State Secretary of Transportation Roger Millar argues that road usage charging should include congestion pricing now. He claims this approach is what congressional leaders want. Yet, Congress’ primary intent is to help states test and find a sustainable replacement for fuel taxes. Congestion pricing can be a viable policy in urban areas but should not be a current focus of the state’s testing of road user charges as a replacement for fuel taxes.
Some in the WSDOT also seem interested in collecting mileage data, less for RUC collection purposes, but in apparent hopes of creating a system for reducing the number of vehicle miles traveled. Even the Washington State Transportation Commission has changed its position from recommending constitutional protection of RUC money, similar to the fuel tax, to dedicating it by policy to the preservation and maintenance but not expansion of highways. As the state grows, this could limit needed new road capacity, especially in Seattle.
There are going to be differences in how states implement mileage-based user fees. There is still a lot to learn and improve. No state’s pilot program or road user charging system is likely to be wholly separated from politics or invulnerable to mistakes and mismanagement. But states can already identify best practices and the benefits of road user charges being true user fees in which the users of roads pay for the infrastructure, and that money is used to maintain, repair and expand those roads.
Most transportation researchers generally agree that mileage-based user fees are the most promising long-term successor to the fuel tax. However, allowing special interests to hijack the early design and implementation efforts is a significant mistake that states like Washington should do more to avoid. To replace gas taxes, drivers and truckers need to see mileage fees as a fair, viable long-term funding source that will be used to build and maintain the roads they use and pay for.