- 2022 International Truck MBUF pilot breaks new ground
- EV future depends on highway service plazas
- Census data reflect commuting changes
- New findings on equity in priced managed lanes
- Federal per-mile user-fee pilot takes first step forward
- News Notes
- Quotable Quote
The Eastern Transportation Coalition has done the most important work east of the Mississippi on mileage-based user fees (MBUFs). Besides carrying out multi-state pilot tests of per-mile charging for personal vehicles, it has achieved breakthroughs with pilot projects for commercial trucks. These breakthroughs continued in the coalition’s 2022 International Mileage-based Truck Pilot, whose final report was released on Sept. 12.
As I reported in the March 2022 edition of this newsletter, the coalition’s 2020-21 national pilot program included active participation by commercial truck companies and creating a Motor Carrier Working Group representing a cross-section of the industry. That working group raised concerns about the feasibility and fairness of the original idea of a truck MBUF based on a truck’s average fuel economy. It recommended testing per-mile charges based on truck weight categories. The working group also pointed to two trucking industry clearinghouses that apportion truck fuel use among the states where they drive (the International Fuel Tax Agreement—IFTA) and another that does likewise for state truck registration fees (the International Registration Plan—IRP).
The feasibility of these ideas was tested in the 2022 International Mileage-based Truck Pilot with some promising results. The six-month pilot program included 250 trucks that drove eight million miles in 49 states and four Canadian provinces. Each truck was equipped with an EROAD telematics device to record miles traveled and other data. The 14 trucking companies each received a simulated monthly statement about the hypothetical charges their trucks incurred and other relevant data.
There were four main research objectives for this truck MBUF pilot:
- Could all commercial vehicles (including intrastate trucks) eventually be included in this kind of system?
- How would a weight-based system actually work, in terms of feasibility and simplicity?
- Would individual states and Canadian provinces accept a general truck MBUF framework with state-specific per-mile rates?
- How feasible would it be for clearinghouses to expand their scope to handle truck MBUFs?
Progress was made on all four of these objectives. Some of the findings are too complex for a short newsletter article, so those interested should read the entire 72-page report. I will focus here on points two and four above. The short answer to questions one and three is that intrastate trucks might be possible to include, but this would be more complex than for interstate trucks because state-specific registrations and regulations are nowhere near as standardized, and the clearinghouses would need to change their bylaws and methods of operation to include intrastate trucks. The study also found that the actual cost per mile paid by trucks via fuel taxes varies considerably and does not provide a transparent link between fuel use and highway use.
The good news on weight-based charging is that a workable model was developed. There was general agreement that the most feasible of an array of types of weight is the “registered weight” of a truck, which is independent of its configuration or its actual operating weight on an individual trip. There was also agreement to test weight bands, with higher rates per mile the higher the weights in each band. Ways of calculating this for each state, and comparisons with the average amount paid in fuel taxes in each state, were developed during the pilot. As with state diesel taxes, the amount to be collected per mile varied similarly among the 49 states.
The good news on the IFTA and IRP clearinghouses (and an independent one proposed by ClearRoad) is that they cooperated with the pilot study and tested ways of dealing with state-specific data on each fleet’s miles driven and hypothetical amount paid in each state and came to understand what changes they would need to make to accommodate a nationwide truck MBUF system. The pilot project did not set out to forge any such agreements with IFTA or IRP; this was simply a test of the feasibility of making such changes at some future date in the evolution of MBUF implementation.
This is all very positive news, especially given the early skepticism of the American Trucking Associations and the long-standing opposition to the weight-distance taxes used by a handful of states. One factor that came across from the Motor Carrier Working Group is the desire to simplify the overall truck taxation/user-fee system. If existing federal and state truck user taxes could be replaced by a federal/state MBUF system that was transparent and secure, that would be a positive change for this important industry.
I’ll conclude with one concern the report raised for me. The emphasis on simplicity in the weight categories chosen for this study would ignore things like the number of axles on a heavy combination truck. Decades of research on pavement damage has found that it’s not so much gross weight itself that damages pavement as it is the gross weight per axle. A truck mileage-based user fee system that ignores this may cause concern among state departments of transportation and civil engineers, and rightly so. This point should be the subject of future discussion within the MBUF community, with the American Association of State Highway and Transportation Officials, and with the Coalition’s Motor Carrier Working Group.
Energy Secretary Jennifer Granholm received a lot of media coverage of her electric vehicle (EV) road trip around the Southeast. The most complete report was probably NPR’s Camila Domonoske’s photo-illustrated Sept. 10 account (“Electric Cars Have a Road Trip Problem, Even for the Secretary of Energy“). Among the embarrassing political snafus was an advance staffer of Granholm’s motorcade parking his gas-powered vehicle at the only vacant electric vehicle charger when they were near Augusta, GA, leading to an irate EV owner calling the cops. Domonoske, who noted that she drives an EV herself, says her major takeaway from the trip is that “EVs that aren’t Teslas have a road trip problem.”
Business Insider transportation reporter Tim Levin’s piece, “EV owners are fed up with charging stations that lack bathrooms, snacks, and even trash cans,” cited a recent J.D. Power survey on consumer sentiment that found one of the most common complaints is that EV drivers are consistently unhappy with the unavailability of things to do while charging their cars, given that a typical charging takes about 30 minutes. Restrooms, garbage cans, and a place to get food or to shop are all wanted. And in some locations, vehicle chargers may be in “some dimly lit corner of a parking lot, meaning they can be unsettling to access at night.”
That article reported some progress, in part from current charging providers and, in other cases, from startup companies. Existing provider Electrify America is planning “flagship locations with lounges, dining options, and stores.” Tesla has announced plans for a 1950s-style diner at one of its Supercharger locations. Startup Blink Charging told Business Insider that it has new requirements for future locations, including bathroom and food options open 24 hours a day. Another startup, Rove, says it is planning “flagship locations” with lounges, dining options, and stores.” As I’ve reported previously, some exurban and rural gas stations with very large acreage are in the process of adding EV chargers. Nearly all such gas stations already have restrooms and convenience stores offering snacks and beverages.
For long-distance highway travel, what these companies are describing are service plazas, like those on Florida’s Turnpike, the Indiana Toll Road, the New York Thruway, etc. What Congress is offering grants for in this segment of the EV charging market is stand-alone chargers no more than one mile off the Interstate highway. That clearly fails the emerging market demand. The non-tolled long-distance Interstates need real service plazas every 50 miles. But as I’ve written before in this newsletter, two barriers stand in the way. One is a 1960 provision in federal law that bans any “commercial services” at Interstate rest areas. The other is far too little land at most of those rest areas to accommodate a proper service plaza.
The solution is two-fold. First, Congress must repeal the antiquated ban on commercial services at rest areas, overcoming the status-quo position of the National Association of Truck Stop Operators (NATSO). Second, state transportation departments, which own the land at rest stops, need to emulate toll roads, which have entered into long-term public-private partnerships (P3s) with service-plaza developers and operators to finance both the land acquisition and the facility development for the new plazas, based on the projected revenue stream from the commercial services that would locate there. Summary data on recent service plaza public-private partnerships are included in my 2021 Reason Foundation policy study, “Rethinking Interstate Rest Areas.“
Initial data from the Census Bureau’s American Community Survey (ACS) on U.S. commuting were released last month. The data provide some clues about how commuting is still changing following the COVID-19 pandemic. In the table below, I compare commuting from well before the pandemic (2005) with the year just before the pandemic (2019) and the first year of the recovery period (2022). Between 2005 and 2019, the changes are quite modest. But 2022 is likely a preview of how the post-pandemic era will be.
|Work from home||3.6%||5.7%||15.2%|
|Mean travel time (minutes)||25.1||27.6||26.4|
These data show that although driving alone has decreased, those people have not switched to carpools, transit, or walking, biking, or other means (taxi, ride-hailing). While there are reports of a lot of companies bringing workers back to the office, many people have shifted to working from home. The reduction in solo commuting does not explain the return of urban freeway traffic to nearly pre-pandemic levels in many metro areas. That seems to be due to increased travel outside of traditional peak periods, as evidenced by somewhat flattened peak travel and more off-peak car travel, as people take advantage of more flexible schedules. It’s also interesting to note that even in 2019, the national percentage of people working from home exceeded the fraction commuting by transit.
Randal O’Toole, who writes the Antiplanner, which he describes as “a blog dedicated to ending government land-use regulation, comprehensive planning, and transportation boondoggles,” posted some details on the prevalence of work-from-home as of 2022 in his assessment of the new ACS figures posted on Sept. 18. The ACS national average of 15.2% fails to convey how large the shift to working from home is in select metro areas with a lot of technology and data employment. Metro areas with 35% or more work-from-home include the Dallas suburb of Frisco, Seattle, Arlington (VA), San Ramon (CA), and Fremont (CA). Close behind is Washington, D.C., at 33.8%.
The other significant change is the sharp decline in transit commuting since the pandemic. Data from the 10 metro areas with the highest 2019 transit share have lost very large fractions of their former transit customers, as the table below (also from the 2022 ACS) reveals.
|Rank||Major Metro Area||2019 Transit Share||2022 Transit Share||Change|
Comparable transit declines for other large metro areas include Los Angeles (-33.3%), San Jose (-64.8%), Denver (-51.9%), Minneapolis-St. Paul (-55.0%), and Salt Lake City (-57.9%).
In these major metro areas, one must ask whether pre-pandemic plans for additional rail transit megaprojects still make sense, if post-pandemic transit ridership levels out at about half the pre-pandemic level.
For example, should San Jose continue with the hugely costly Bay Area Rapid Transit (BART) rail extension? Should San Francisco still plan to build a second BART tube to the East Bay? Should Portland continue to insist on adding rail transit to the megaproject I-5 highway bridge across the Columbia River?
Economists argue against falling for the ‘previous investment trap—i.e., ‘We’ve already put a lot of money into this project, so we need to finish it.’ The wiser course is generally to cut your losses before wasting even more money—but this can be very difficult politically.
Smaller transit agencies also need to think about their future role in the post-pandemic era. My Reason transportation colleague Baruch Feigenbaum has written two policy briefs with suggested near-term actions that smaller transit agencies should consider. The first brief outlines actions transit agencies could take immediately to address their ridership and budget current problems. The second paper suggests additional changes to be implemented over the next two years as federal stimulus funding runs out and transit agencies are forced to address looming fiscal cliffs.
Are priced managed lanes “Lexus Lanes,” serving only or mostly the well-off? That perception exists and is often one of the first objections raised when a state transportation department plans to implement the first such lanes in a metro area. Transportation equity has received greater visibility in the Biden administration’s Department of Transportation, and, speaking frankly, it’s a concern raised more often in politically blue states like Minnesota and Washington than in red states like Florida and Texas.
As I reported here several years ago, the University of Washington did ground-breaking research that debunked the Lexus Lanes argument over the express toll lanes on I-405 in the Seattle metro area. That research found that the net benefits of using the express lanes—defined as the value of time savings minus the cost of the tolls—was greatest for express lane users in the lowest income quintile. The study found lower-income drivers used the express lanes less often, but they derived real value from those uses.
Now the Minnesota Department of Transportation (MnDOT) has done its own analysis, using data from the E-ZPass lanes on I-394, I-35W, and I-35E, along with extensive demographic data about the users of the general-purpose lanes and the E-ZPass lanes. MnDOT’s E-ZPass lanes are open at no charge to carpools and transit buses and for transponder users who pay variable prices. Because of these policies, the research found that 80% of those using the E-ZPass lanes are either carpoolers or transit riders, which may not be the case for express toll lanes that provide discounts (rather than free passage) for carpools or in metro areas where transit agencies have not taken full advantage of the priced lanes for faster and more-reliable express bus service. Given the 80% non-paying travelers in the E-ZPass lanes, it was not that surprising that the study found there is “little income difference between E-ZPass lane users and travel-shed [e.g., general-purpose lane] users.
The study also identified nine measures transportation planners could use to evaluate potential equity impacts of proposed additions to the E-ZPass lane network. They include transit benefits, such as faster travel times and increased access to jobs, increased highway safety, and air quality and noise-level improvements.
This research is important because MnDOT has plans to expand the network to encompass portions of I-94, I-494, I-694, and US 169. If these projects are all built, the regionwide benefits of the E-ZPass network will be much greater than the benefits already being realized.
After nearly two years of unexplained delay, the long-awaited national pilot program on mileage-based user fees (MBUFs) is finally moving forward. The Infrastructure Investment and Jobs Act (IIJA) was signed into law in Nov. 2021 and established the National Motor Vehicle Per-Mile User Fee Pilot, which is to test the feasibility of replacing federal fuel taxation with MBUFs.
The first step in implementing the national pilot is creating a Federal System Funding Alternative Advisory Board to inform program design. On Oct. 3, the Federal Highway Administration (FHWA) issued a notice soliciting advisory board nominations, which are due Nov. 17. While this is welcome news, it comes nearly 20 months late, and it is increasingly unlikely that enough time remains for the pilot program to meaningfully inform Congress in advance of the next surface transportation reauthorization bill in 2026.
In crafting the national mileage-based user fee pilot program’s authorization, lawmakers specified a number of requirements on participant inclusion (e.g., vehicle type and geographic distribution), collection mechanisms (e.g., in-vehicle telematics, fueling stations), privacy and data security protections, rate design (e.g., vehicle weight, congestion), and payment. Congress also set several implementation deadlines, each building on the last and with the goal of ensuring lawmakers receive meaningful results from the pilot to inform their next multiyear highway bill. The starting point for all these programmatic deadlines is Nov. 15, 2021, when President Joe Biden signed IIJA into law.
Based on the date of enactment, IIJA’s deadline for establishing the advisory board was Feb. 14, 2022, and the advisory board was supposed to provide implementation recommendations to DOT one year later on Feb. 15, 2023. But since FHWA’s advisory board nomination notice wasn’t published until Oct. 3 of this year, implementation has been effectively delayed for 20 months later than Congress intended.
The advisory board nomination and appointment process is likely to take a few months as DOT conducts background checks, conflict of interest reviews, and other due diligence activities. This means the advisory board won’t be up and running until Jan. 2024 at the earliest. If the advisory board submits recommendations on time—factoring in its delayed establishment, so Oct. 2024—DOT likely won’t begin implementing the pilot program until Jan. 2025.
DOT will obviously miss the deadline for one of the reports on the results of the national pilot, which Congress ordered to be delivered by Nov. 15, 2024. This report was also to include a summary of results of state-level MBUF pilots authorized by IIJA’s Section 13001 Strategic Innovation for Revenue Collection technical assistance grant program, none of which have been funded to date. The notice of funding opportunity for this state technical assistance program is expected to be published in the next few weeks and should combine three award years (FYs 2022-2024), but this won’t speed the implementation of any of the intended state MBUF pilots.
With the deadline for the combined federal and state pilot report missed and likely a lost cause, there is still a reporting schedule for the national pilot that may be able to inform Congress in advance of the next surface transportation reauthorization bill due by Oct. 1, 2026. In IIJA, Congress requested annual reports on the national pilot to begin one year after volunteers begin participating. Congress had intended to receive multiple annual reports on the pilot program’s progress, but DOT’s delay means it will be only possible for them to receive a single annual report before the next highway bill is due.
Meeting this schedule will require DOT to take no more than six months to complete volunteer enrollment, which is very ambitious given how long it has taken to establish a simple federal advisory committee. But if it somehow manages to pull this off and keep to the reporting schedule, Congress could expect a single progress report on the national pilot by July 2026—three months before the surface transportation reauthorization is due.
Unfortunately, even if this optimistic scenario plays out, it will likely be too little, too late. One year’s results may not be particularly meaningful, and three months is simply not enough time for Congress to digest these results and take appropriate legislative actions. The intent of the IIJA’s National Motor Vehicle Per-Mile User Fee Pilot is laudable, but DOT’s failure to adhere to Congress’s implementation and reporting schedule means little progress can be expected under the current law.
To avoid a repeat of this mishap and to ensure the national mileage-based user fee pilot program can live up to its potential, Congress should be prepared to reauthorize it in the 2026 highway bill. Most importantly, oversight from the House Transportation and Infrastructure Committee and Senate Environment and Public Works Committee needs to begin immediately and be conducted consistently throughout the duration of the pilot. With proper stewardship from both DOT and Congress, a national MBUF pilot can conduct a thorough evaluation of the feasibility of MBUFs as a nationwide replacement for fuel taxes. With a bit of luck, the results of a successful national pilot may be able to meaningfully inform future actions for the anticipated 2031 highway bill.
Florida Express Toll Lane Projects Moving Forward
Projects are under way to add to the emerging networks of express toll lanes in both southeastern Florida and the Tampa Bay Area. Under construction in Broward County (Ft. Lauderdale) are two projects: extending the I-595 express lanes to the I-95 express lanes and extending the I-95 lanes northward into Palm Beach County. In addition, the Turnpike Authority is adding express toll lanes to the Homestead Extension of Florida’s Turnpike (HEFT) in southern and western Miami-Dade County. In the Tampa area, construction is under way on adding dual ETLs each way on I-275 near St. Petersburg, adding elevated express toll lanes (ETLs) on the Gateway Expressway, and adding ETLs on the rebuilt and expanded Howard Frankland Bridge. These projects are part of an expanding toll network in the Tampa Bay Area.
Florida Brightline’s Opens
With last month’s long-awaited start of Brightline Florida’s passenger rail service between Miami and Orlando, I talked with a number of reporters about the project, often contrasting it with the costly and still-struggling California high-speed rail construction. The first of these Brightline stories is a very good 15-minute Reason TV documentary by Natalie Dowzicky, including interviews with Brightline executives, and a few points from me. I was also a recent guest on the PBS weekly program “White House Chronicle.” This wide-ranging 30-minute conversation between me and co-hosts Llewellyn King and Adam Clayton Powell III discussed passenger rail worldwide, in addition to Brightline and California.
What if Transit Was Like Uber? It Is Now, in Wilson, NC
In a widely published Associated Press story on Sept. 15, reporter Jeff McMurray explained how the small city of Wilson, NC, dropped its fixed-route bus service and replaced it with on-call van service provided, under contract, by New York-based VIA, a microtransit company, which has contracts for supplemental service in Austin, Chicago, New York, and the Blackfeet Reservation in Montana. The Wilson project is partly supported by federal grants, enabling VIA to charge only $2.50 per trip. Much of the 23-square-mile city had little or no bus service when that system was still in operation. The VIA vans go everywhere. Still to be resolved is how the city would pay for the service when the federal grants run out.
Missing Link in Raleigh, NC, Is Now Under Contract
The North Carolina Department of Transportation and the NC Turnpike Authority last month announced the first of two construction contracts for the missing link in the Triangle Expressway (NC 540). The project will add the last section of this project, also known as the Raleigh Outer Loop. Full completion of this six-lane urban toll road is expected by 2028. NC 540 will link with I-540, which provides the northern part of the Outer Loop.
Large Toll Road Companies Selling Majority Interest in Milan Ring Road
The A58 Milan outer ring road in Italy is majority-owned (65%) by the two largest Italian toll road companies, ASTM and ASPI (Autostrade per l’Italia). Inframation reported that the companies are planning jointly to sell their ownership stakes. The sale is expected to interest infrastructure funds, pension systems, and insurance companies, all of which invest in utility-like businesses with promising long-term revenue streams. The sale is estimated to have an enterprise value of up to €2 billion.
Puerto Rico Names Finalists for Long-Term Toll Road Lease
The Puerto Rico Public-Private Partnership Authority selected two of the three teams as finalists for a 50-year public-private partnership concession to modernize and operate four toll roads: PR-20, PR-52, PR-53, and PR-66. The finalists are Abertis (which operates two other toll roads and a toll bridge in San Juan) and a team led by Sacyr teamed with Star America. The estimated investment in the concession is $2.5 billion, according to Inframation.
Northern Virginia Express Toll Lanes Doing Best-Ever Business
A lengthy Washington Post article, “New Habits Are Making More Commutes Miserable,” documents post-pandemic changes in travel patterns, with decreases in DC-area transit use and more cars on the road than people expected—hence, longer-duration rush hour periods. But near the end of the article comes some good news. The region’s large network of express toll lanes is proving its value. Because more motorists are opting to use the express lanes, the variable prices are necessarily somewhat higher than before (to keep those lanes free-flowing). That means increased revenues. The article reports data from toll lane developer/operator Transurban saying that traffic in the express toll lanes on I-95, I-395, and I-495 is up by 13% over the previous year and revenue up 22%.
Hawaii Is Fourth State to Implement Permanent Road User Charging
As of 2025, Hawaii will be the fourth state to go beyond pilot projects to charge motorists per mile driven rather than gallons of fuel used. Hawaii’s system will be based on odometer readings during annual motor vehicle safety inspections. At first, the system will be an alternative to the gas tax, but as of 2033, it will be required for all passenger vehicles (with electric vehicles switching no later than 2028). Hawaii lacks out-of-state vehicles, so its system can be simpler than those of other states.
Highway Widenings Proliferate in Some States
Last month saw announcements of highway widening projects in at least four states. Alabama Gov. Kay Ivey announced widening projects for portions of I-65, I-459, and I-59. Louisiana DOTD announced the third of three stretches of widening I-12 north of New Orleans. Oklahoma DOT unveiled plans to widen I-35 over the next 15 years at a cost of $2.5 billion and the Oklahoma Turnpike Authority received clearance for the first of a series of revenue bond issues to finance its $5 billion, 15-year turnpike expansion plan. The project will add two new toll roads in the Norman area and widen several existing turnpikes.
Three Auto Companies to Create a Vehicle-to-Grid Company
BMW, Ford, and Honda last month announced a joint venture company called ChargeScape, whose goal is to enable electric vehicle owners to sell electricity from their EVs to their local electric utility. Why would EV owners do this? The companies’ talking point is that this will save the EV owners money, by lowering their monthly EV charging bill. That’s true, but presuming most of these people want to be sure their EV is charged and ready to go whenever and wherever they need it, this strikes me as a questionable premise. Anyone who lives where natural disasters are a threat will want to be evacuation-ready at all times. As someone who lives in hurricane country, I would not take that deal.
Ohio Turnpike Adds EV Charging Units
The Ohio Turnpike has announced the addition of 80 electric vehicle charging units at eight of its service plazas. They comprise 64 Tesla Superchargers and 16 Electrify America chargers. The service plazas are open 24 hours a day, and their amenities include an array of brand-name food providers and other retailers, in addition to restrooms. The turnpike aims to have EV charging facilities at all 14 of its service plazas in the coming years.
Taxing Electric Vehicles?
Sen. Deb Fischer (R-NE) and three other Republican Senate members have introduced a bill called the “Stop EV Freeloading Act.” It would authorize a federal tax on the sale of electric vehicles and batteries, with the proceeds transferred to the federal Highway Trust Fund. It may be well-meaning, but a one-time tax of $1,000 when a dealer sells an electric vehicle plus a $500 tax on each battery module bears zero relationship to the amount of use the EV would get on highways or the wear and tear caused by their heavier weight. The sponsors of the bill would be better served focusing on the growing consensus that a per-mile charge is the best replacement source for federal gas taxes.
Prof. Anas Wins Award for 2023 Overall Best Paper in Transportation Economics
The economics journal article by Prof. Alex Anas that I highlighted in the August issue of this newsletter won the Overall Best Paper Award for 2023 at the annual conference of the International Transportation Economics Association. The paper, whose SUNY Buffalo news release was headlined “Adding road capacity decreases congestion, and increases distance traveled,” challenges assumptions made in modeling by economists who concluded that capacity additions don’t have positive effects.
“[W]e need to confront the social downsides of housing policies that force density on a public that doesn’t want it. The current planning regime works to make home ownership increasingly difficult, particularly for millennials and our increasingly diverse population. The lack of affordable, family-friendly homes is linked to low marriage and fertility rates, as people who own their homes are far more likely to have children. In a country with record-low fertility, facing a shrinking workforce and an aging population, this does not bode well for America’s future. The fact is that for most people, the densification agenda means a lower standard of living. Reducing the standard of living is not an appropriate role for urban planning.”
—Joel Kotkin and Wendell Cox, “Building the New America,” Urban Reform Institute, 2023