A road user charge or RUC (also referred to as the Vehicle Miles Traveled Tax or VMT Tax and Mileage Based User Fees or MBUF) currently permeates nearly every discussion of how our country will pay for infrastructure in the future. Many transportation planners and elected officials seem to agree the time has come to find a new way to fund infrastructure in this country. The reason—the Highway Trust Fund seems to be always on the edge of insolvency due in part because federal fuel taxes have remained fixed since 1993 and now hold about 40 percent less value than 25 years ago. The other reason for the teetering Trust Fund? It keeps getting raided to support non-highway projects. That’s the subject for another newsletter.
Both federal diesel and gasoline taxes have stagnated at 24.4 cents per gallon and 18.4 cents per gallon respectively. As vehicles become more fuel efficient, fuel tax revenue will decrease even more. Some experts estimate that by 2025, 14 percent of all cars and trucks could be electric-driven.
Would an RUC program on the federal level be able to provide enough funds for all infrastructure needs? The fuel tax is pretty straightforward—you fill up at the pump and pay the fee the same time you pay for gas. With an RUC program, the government could charge individuals and fleet managers yearly or monthly payments based not only on the miles driven in that period but also when and where those travels occurred.
How would those miles be determined is one huge question—annual inspection, GPS tracking, or some other technology not yet identified? Many toll roads have recently gone entirely cashless with the use of vehicle transponders or automated license plate readers. As evidenced with the yearlong saga of the Florida SunPass Scandal, the task of paying later is not automatically assured. Would an RUC program administered by the government or by a public-private partnership (PPP) be any different?
Despite all these issues, infrastructure wonks wring their hands and talk about how RUCs will save the day. Already In 2019, three different national reports came out that extoll the virtues of charging by the mile.
The National League of Cities published a report in March called Fixing Funding by the Mile: A Primer and Analysis of Road User Charge Systems. The League advocates for 19,000 local municipalities representing more than 218 million Americans. League President and Mayor of Gary, Indiana Karen Freeman-Wilson stated this when the report came out:
“Having safe, reliable infrastructure is a priority for every single local leader. Investing in infrastructure means investing in the people in our communities. By piloting new technologies like road user charge systems, local leaders have the opportunity to find ways to sustainable and equitably fund infrastructure.”
RUC is not the only scheme in mind, though, to help transform the way the US funds infrastructure.
Not surprisingly, the International Bridge, Tunnel and Turnpike Association (IBTTA) came out in support of a report from the Competitive Enterprise Institute (CEI) that asked Congress to authorize the use of a national RUC program and a new wrinkle—make it much easier for states to legislate toll roads. A one-two punch, so to speak, to the American driver.
The report, Transforming Surface Transportation Reauthorization: A 21st Century Approach to Address America’s Greatest Infrastructure Challenge states that funding the federal Highway Trust Fund with fuel taxes is unsustainable. The report also notes that Congress spent $140 billion bailing out the fund since 2008.
In April, the Information Technology and Innovation Foundation or ITIF sent to Congress its report, A Policymaker’s Guide to Road User Charges. The ITIF stated that “A national “road user charge” system would ensure that everyone who drives on America’s roads contributes their fair share of the infrastructure costs. This would solve the issue with better fuel efficient and electrified vehicles contributing to road funding and would collect revenues based on actual costs imposed on the system.”
The ITIF asked Congress to pass legislation to establish a national RUC system based on Global Positioning System (GPS) data taken from both passenger vehicles and commercial trucks. The organization proposed a three-to-five year transition period to allow automakers to place technology in cars and for the USDOT to develop a national RUC payment system.
At an April ITIF panel discussion about the possible switch to RUC, American Association of State Highway Transportation Officials spokesperson, Susan Howard said:
“The one thing we’ve heard from state DOTs is that they’re mindful that upping the number of alternatively fueled vehicles (AFVs) on the road will impact fuel tax revenues—and an RUC or VMT program seems the best way to address that issues most effectively.”
ITIF President Robert Atkinson added:
“Another reason RUCs are ‘gaining ground’ is that it appears really for the first time since we’ve looked at this issue that there is very serious interest from Congress. That’s fantastic; that’s really new.”
Next week in Part 2 of Are We Slinking Ever Closer to a Universal Road User Charge?, we will focus on what Congress is up to in promoting RUCs and another aspect of mileage-based collection systems that is getting less play around the country.