A New Way to Pay for Transportation

Exploring a Shift from Fuel Taxes to Mileage-Based User Fees

The nation's Highway Trust Fund is nearly empty as Congress confronts the challenge of declining revenues from the federal road fuel tax. Federal and state fuel taxes — paid at the pump on each gallon of gas or diesel — have provided most of the funding for U.S. highway construction and maintenance and, more recently, have supported transit investments as well.

But increasing fuel efficiency and the rise of alternative fuel vehicles that do not use gasoline have led to growing shortfalls in federal and state funding for surface transportation programs — shortfalls that are likely to become even more acute in coming years.

As a result, some state and federal policymakers have begun to explore a shift from taxing fuel to taxing a vehicle's miles of travel instead. Mileage fees based on vehicle miles traveled (VMT) are viewed by many as a promising alternative to fuel taxes because, among other reasons, VMT revenues would be unaffected by fuel economy or fuel type and fees could be structured to help address other transportation goals, such as reducing congestion, harmful emissions, and road wear. But transitioning from fuel taxes to VMT fees would be a challenging undertaking with many technical, institutional, and political uncertainties to be resolved.

About the Speaker

Liisa Ecola is a senior project associate at the RAND Corporation. A transportation planner with interests in transit, transportation demand management, finance, and environmental and land use impacts, she has co-authored three reports about mileage fees: Implementable Strategies for Shifting to Direct Usage-Based Charges for Transportation Funding, Moving Toward Vehicle Miles of Travel Fees to Replace Fuel Taxes: Assessing the Path Forward, and Mileage-Fee Design Strategies to Reduce System Cost and Increase Public Acceptance. Ecola is currently working on projects ranging from long-term mobility trends in developing countries to traffic safety policies. Prior to joining RAND, she worked in transportation, land use, and policy consulting. She received her master of city planning degree from the University of California, Berkeley.