Implementable Strategies for Shifting to Direct Usage-Based Charges for Transportation Funding

Motor fuel taxes have been the principal source of highway revenue for close to a century. Levied on a cents-per-gallon basis, however, they must be periodically raised to offset the effects of inflation and improved fuel economy, and elected officials have grown increasingly reluctant to take on this unpopular task in recent decades. With the anticipated introduction of more fuel-efficient conventional vehicles and alternative fuel options in the coming years, the ability of fuel taxes to raise sufficient revenue may be further undermined. Based on these considerations, a growing number of analysts have argued, convincingly, that the nation should replace motor fuel taxes with a system of road use charges based on vehicle-miles of travel (VMT). Most proposals in this vein envision the use of sophisticated in-vehicle metering equipment, which might be phased in with new vehicle purchases. Yet this would require a prolonged transition period of many years, and the nation's transportation funding challenges are already urgent. There is thus interest in determining whether it might be possible to implement a system of VMT fees much more rapidly, commencing by 2015. This study identified a range of options that might support the near-term implementation of a national system of VMT fees and evaluated their relative strengths and weaknesses. Based on the research, three options appear to offer the greatest promise: metering mileage based on fuel consumption, metering mileage based on a device combining cellular service and a connection to the onboard diagnostics port, and metering mileage based on a device featuring a GPS receiver. While each of these approaches has its own set of advantages and disadvantages, there are also significant uncertainties that make it difficult to determine the optimal configuration at this juncture. The upcoming reauthorization of the transportation bill, however, provides the opportunity to fund a set of activities — encompassing planning, analysis, technical research and development, expanded real-world trials, and education and outreach — that could resolve the uncertainties and set the stage for implementing VMT fees beginning in 2015.

Reprinted with permission from NCHRP, Web-only document 143: Implementable Strategies for Shifting to Direct Usage-Based Charges for Transportation Funding. Copyright © 2009 National Academy of Sciences.