Six States To Study Replacing Fuel Excise Taxes With Mileage Fees

An ambitious study to charge motorists by the mile, which hopes to address decreasing gas tax revenue for both states and the federal government, will begin in North Carolina's Research Triangle.

"As part of a $16.5 million nationwide study over the next two years, 450 Research Triangle drivers in NC will help road-test a new way to pay for transportation -- by the mile, not by the gallon."

The University of Iowa Public Policy Center will oversee the Road User Charge Study in North Carolina and five other states.

"The mileage fee idea is fueled by the same forces that are pushing North Carolina into the business of collecting tolls from expressway drivers. North Carolina and 14 other states joined Congress in commissioning the Iowa study to weigh collecting user fees for city streets and rural highways as well."

The study "will experiment with rates that would generate about the same revenue now produced from the gas tax. Congress and state legislatures would decide whether to set fees higher or lower."

"The federal Highway Trust Fund relies mostly on gas-tax money to pay for state road construction. The fund is expected to drop from an $8.1 billion surplus this year to a $1.7 billion deficit by 2009."

"The Iowa researchers will outfit volunteers' cars with computers and satellite gear to record where and how far they drive. It will test the hardware, the billing system and the popular support that would be needed for a shift to mileage fees. The on-board computer will know which state the car is traveling in, and it will calculate the mileage fees payable to each state at the end of the month."

"The study will also test options to vary the fee per mile for different vehicles and different times of day. Some possibilities:

* Higher fees for heavy trucks to reflect their share of pavement wear and tear.
* A rush-hour premium to cover the cost of freeway congestion.
* Lower fees to encourage more alternative-fuel and low-emission cars."

Thanks to pat carstensen

Full Story: Drivers might pay road taxes by mile



What is the purpose?

How is changing the measuring tool going to fix the deficit problem?

Irvin Dawid's picture

VMT Fee vs Gas Tax

Here's the advantages as I see them, thus enabling the VMT fee to address the deficit problem:

1. Alternative fuels may not be subject to gas tax, so a VMT fee captures all motor vehicle travel, regardless of fuel. As President Bush and the democratic congress agree, more ethanol and other alt. fuels are going to be produced. (Ethanol is not subject to federal gas tax, I believe, though states may charge their own, as done in IA)

2. Gas taxes haven't been raised - in many cases, for decade(s); e.g. federal last raised in 1993; in CA, last raised in 1994. A 'new' VMT fee could be started at an appropriate fee to 'address the defecit'.

3. Not only are there going to be more alternative fuels in the future,but 'traditionally-powered' vehicles will be increasing more efficient (esp. in light of Mass vs. EPA that ruled CO2 a pollutant), resulting in less gas tax collected per mile, so a VMT fee addresses that problem.

But do note, that the University of Iowa Public Policy Center's Road User Charge Study will consider at least three variances in terms of what/how to charge that makes the VMT do more than just raise revenue. (This was major news to me.)


Irvin Dawid, Palo Alto, CA

A pro-SUV measure

This is a pro-SUV measure that will encourage people to buy gas guzzlers.

Hey I have an idea... tie the gas tax to inflation! This would be as simple as making it a percentage tax (just like a sales tax) rather than a cents-per-gallon tax as it is. People pay half of what they paid for gas in 1950 (in real dollars) and the inflation-based depreciation of the gas tax is a huge reason.

some disadvantages of VMT

1. reliability and security of onboard computer. How easy would it be to hack it? How hard would it be to remove the device?

2. Increased cost, I imagine administering the gas tax in relatively inexpensive. While this VMT program would require every car to have a computer with gps tracking.

3. Heavier vehicles typically do more damage to the roads and they use more gas, so consequently they end up being taxed more. A gas tax in a way encourages people to drive more fuel-efficient, light, and environmentally friendly cars.

I realize that the VMT system could charge varying fees to different types of vehicles. The strongest advantage I see is the ability to charge a rush hour premium. Still, toll-like entrance points with a smartcard type system might be a better solution.

Hybrid cars could pose a problem in the future, but are not really an issue now. There are not a lot of them on the roads, and people who drive them should deserve a gas tax break.

The best solution to me would be to just jack up the gas tax and peg it to inflation.

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