Mileage-based fees to solve road funding woes?

Michigan could solve its highway funding problems by adopting a system where motorists pay fees based on the number of miles they drive.

According to a report released by the Michigan Environmental Council by Sustainable Mobility & Accessibility Research & Transportation at the University of Michigan, fuel consumption is declining as traditional vehicles become more efficient, electric vehicles more common and alternative transportation more popular.

Together, these factors have strained old models of road funding – namely, gasoline taxes.

The report states that instead of raising fuel taxes to pay for transportation infrastructure improvements, a mileage fee could allocate costs based on the number of miles driven, the time of day, the route taken and the weight of the vehicle.

Currently, Michigan is struggling with a road and bridge funding shortfall of between $1.2 billion and $2 billion a year, according to the Detroit Free Press.

Lawmakers are debating a plan to raise an extra $450 million a year to put toward roads, the Detroit Free Press reports, partly by equalizing the taxes on regular unleaded and diesel fuel and by moving to a percentage tax at the wholesale level.

However, “the longer any state waits to reform its transportation funding system, the more expensive the fix will be,” the the Michigan Environmental Council by Sustainable Mobility & Accessibility Research & Transportation report says.

Elizabeth Treutel, one of the report’s co-authors, told the Detroit Free Press moving to such a system is probably five to 10 years off, but the report is partly intended to start the conversation.

Several states are looking at similar measures, but those involved now would be able to shape how such programs are implemented. “Having Michigan in the forefront would kind of allow Michigan to take the lead and shape and control how this is done,” Treutel told the Detroit Free Press.

She added Oregon has already put into effect a pilot program, where 5,000 volunteers can move to a milage-based system and have their gas taxes and other fees refunded.

California too is looking at switching to mileage-based fees. According to Planetizen, legislation has been introduced by Chair of the California Senate Transportation Committee Mark DeSaulnier to give the California Transportation Agency, the Department of Motor Vehicles and other agencies the authority to track vehicle miles traveled by motorists in a yet-to-be determined city. 



But a milage-based system is still far away in California. According to DeSaulnier’s website, the bill would not allow the collection of fees, and would serve only as a proof-of-concept. “The bill asks the California Transportation Agency to conduct what amounts to a hypothetical dry run of a mileage-based fee and report its findings to the legislature.”

The bill has been introduced and is up for consideration. If approved, the pilot program could start as early as January 2016, according to Planetizen. You can read more about alternative highway funding models here.

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