Thursday, September 1, 2011

Mileage-Based User Fees Could Work, Says Study

Mileage-Based User Fees Could Work, Says Study

29 August 2011 - 7:00am

The Center for Transportation Studies at the University of Minnesota has prepared a comprehensive report on the shortcomings of the fuel tax and how to transition to what they call a mileage-based user fee, a form of a vehicle-miles-traveled fee.

From the report's conclusion: "First and foremost, fuel taxes are not sustainable for funding surface transportation, but the mileage-based user fee (MBUF) would be."

Unlike the conclusions from prior federal commissions and reports, the CTS recommends a transitional revenue mechanism that will lead to the final replacement of the fuel tax. This transitional option includes a federal and state fuel tax component that "would be reset to a lowerbase rate that would be sufficient to generate revenues for baseline transportation needs."
• Mileage-Based Charge Component—Federal and State Level "to fund road and bridge reconstruction and expansion"
• Mileage-Based Charge Component—Local Option for local roads.

The first step, however, is for "policymakers to understand the shortcomings of fuel taxes and how unsustainable they are in the long run." The report highlights the challenges to adopting the MBUF as well.

 University of Minnesota: ITS Institute, August 1, 2011

From Fuel Taxes to Mileage-Based User Fees: Rationale, Technology, and Transitional Issues

David D. Coyle, Ferrol Robinson, Zhirong Zhao, Lee Munnich, Adeel Lari
August 2011
Report no. CTS 11-16


Two national commissions established by the U.S. Congress recommend replacing the current system of funding transportation based on fuel taxes with a new distance-based system of user fees. The State of Oregon has done a pilot project demonstrating a system for transitioning to mileage-based fees by paying the fees at the gas pump. The University of Iowa has conducted pilot tests around the country to determine how drivers respond to a mileage-based fee approach using GPS-based technology. The Puget Sound Regional Council has conducted a test of congestion tolling. Finally, the Minnesota Department of Transportation is testing an approach for collecting mileage-based user charges using commercially available smartphones with built-in GPS devices, in which the charge element is just one of the applications. While there have been discussions among many transportation leaders regarding why fuel taxes are no longer a good way of funding the transportation system, there is by no means a public understanding of why this is so. The public assumes that the taxes they pay at the pump are paying for the system, and that if funding problems exist, they are due to waste and inefficiency. This examination--of the rationale, technology, and transitional issues in shifting from a financing system for surface transportation based on fuel taxes to one that is based on a mileage-based user fee (MBUF) traveled or vehicle-miles traveled (VMT) fee--sets the stage for a policy discussion on transportation-related user fees and lays the groundwork for an extensive public outreach effort.

From Fuel Tax to User Fees.pdf Download this file

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