Are We Slinking Ever Closer to a Universal Road User Charge? Part 3—Regional and Local Efforts: NMA E-Newsletter #551

In Parts One and Two of this series, Are We Slinking Ever Closer to a Universal Road User Charge?, we explored what is happening on the national level and in Congress respectively. Road User Charges (RUC) are also called Vehicle Miles Traveled Tax (VMT) or Mileage-Based User Fees (MBUF). A number of states are experimenting with RUCs on a limited number of motorists. Other states are thinking about doing the same since lawmakers don’t seem to have the stomach to raise fuel taxes or keep their hands off of fuel tax money for pet, non-highway projects rather than to help maintain road infrastructure.

In February, the Federal Highway Administration (FHWA) awarded over $10 million to seven states to test fees assessed to motorists based on how many miles they traveled. Those seven states are California, Delaware, Minnesota, Missouri, New Hampshire, Oregon, and Utah.

Receiving the most extensive grant of $3 million, the state of Delaware currently spearheads the I-95 Corridor Coalition which includes Pennsylvania. The new funding will expand the test program to include partnerships with New Jersey, North Carolina, and Virginia. In 2018, the first phase included a test pilot of 155 motorists. Beginning in October 2019, the second phase involves a multistate pilot of 59 trucks from four motor carriers.

Utah will use its one million dollars of federal grant money to launch an RUC program for electric and hybrid vehicles. Vehicle owners can decide on two options of how to pay: either a flat yearly fee or an RUC fee that will not exceed the amount of the annual charge. Utah’s DOT wants to test how participants will react to privacy and security concerns.

No state though, has done more testing than Oregon. In 2007, Oregon’s Road User Fee Task Force began conducting its first vehicle-miles-traveled tax experiment. In June, Governor Kate Brown announced that the state would expand its voluntary RUC program called OReGo. Motorists in the program plug in a small dongle into their car’s on-board diagnostic port that keeps track of miles driven and fuel consumption. The current charge is set at 1.7 cents per mile but starting January 1, 2020, that charge will keep pace with increases in fuel tax rates. Instead of capping the number of participants, OReGo will now allow anyone who can prove their vehicle receives 20 miles or more to the gallon to utilize a road user fee instead of a gas tax. Also, participants who operate electric vehicles that get 40+ miles per gallon would be exempt from mpg-based registration fee increases.

Even though Hawaii was not one of the states receiving the FHWA funds, it’s DOT earlier this year conducted a listening tour to discuss with citizens a proposed RUC test that will begin this fall. A decade ago, Hawaii set an ambitious goal to reduce its dependence on oil and create a green energy future by the year 2045. Currently, the state fuel tax is 0.16 cents per gallon, which has not changed since 1992. Fuel taxes provide about $83 million or 30 percent of the total $275 million revenue for the state’s highway fund each year. The Hawaii DOT says this share of funding started to decline in 2017. Currently, there are around 8,000 electric vehicles on the road in Hawaii, which makes up about one percent of all vehicles.

During the listening sessions, many motorists were upset to learn more about the new tax. At Kapolei High School, the police had to be called to calm down angry drivers who challenged state officials on the tax proposal. In another session, a resident pointed out that those living in Hawaii have no other reliable transportation except for driving their own car. Many residents stated in the meetings between yearly registration fees, safety inspections, and the cost of living, they could not afford any additional transportation costs.

State Representative Sharon Har said in an interview that drivers in her district felt that charging by the mile would be less fair since the more “affluent” residents live in urban Honolulu whereas the less wealthy live in the rural areas and must commute longer distances.

During the three-year pilot program, participants will receive an annual report of how much they drove (and how much they would have had to pay based on miles traveled) between safety inspections and how much they paid in fuel tax. Following the initial phase, 2000 volunteers would then either be tracked with similar tech as the Oregon pilot or through annual safety checks. The study will not include trucks or other commercial vehicles since the DOT claims there has not yet been a decrease in diesel tax revenue.

The State Smart Transportation Initiative and Smart Growth America stated in a recent study that the state of Hawaii still needs to curb how much Hawaiians drive to make their 2045 emissions goal. The study also found that if the state does not cut vehicle miles traveled, then the energy grid would need to produce one-third more energy than presently. Both groups suggested in the study that the state should pair electric vehicles with mixed-use land development, and better mobility choices to reduce the vehicle miles traveled by 20 percent to reach the emissions target within the next two to three decades.

Nearly every state in the country has road infrastructure funding issues and a myriad of political issues. Fabricating a way to charge motorists by the mile is ripe for abuse both in how the program is carried out and by utilizing yet another way to charge drivers when many have no other choice but to drive for work and family commitments.

Not an NMA Member yet?

Join today and get these great benefits!