Key considerations for states developing mileage-based user fee pilot programs

"States considering replacing gas taxes with mileage-based user fees can learn from pilot programs in Hawaii, Michigan, California, and Texas."

Developing a mileage-based user fee pilot program   

"Well-constructed pilots will produce enough relevant information for lawmakers to make an informed decision about implementation or how to address identified barriers to implementation." 

"Rising costs and inflation, along with increased fuel efficiency and electric vehicle adoption, have created a major problem for state transportation revenues. Many states are examining funding alternatives to fuel taxes, such as mileage-based user fees, to help bridge the gap between transportation system needs and revenue projections. 

"Seventeen states have received federal Surface Transportation System Funding Alternatives (STSFA) grants to examine mileage-based user fees (MBUFs), which are also called road usage charges (RUCs).

"Two coalitions, RUC America and the Eastern Transportation Coalition, are multi-state partnerships of transportation agencies that share research and pool funding to help member states study mileage-based user fees. More states plan to evaluate MBUFs in the near future.

"However, implementing a state MBUF program is complex, and pilot programs are the first step in analyzing how a permanent program could be implemented. With some state departments of transportation already struggling to repave roads, let alone run mileage fee pilot programs, gleaning the highest value of data from these pilot programs is essential.

"To maximize the effects of pilot programs, states need to learn from best practices and what has been done across the country. Roadmaps outline stages for a mileage-based user fee pilot program and what the program should be designed to address: ideally, questions that can’t be modeled in other ways.  

"While revenue and rates, for example, can be modeled and estimated on paper, questions like how drivers will react to a road usage charge and which mileage-reporting option they will prefer are at the heart of a pilot program’s goals.". . . More.

Jay Derr is a transportation policy analyst at the Reason Foundation.