Skip to Main Content
Have library access? Log in through your library
Mileage-Based User Fees for Transportation Funding

Mileage-Based User Fees for Transportation Funding: A Primer for State and Local Decisionmakers

Paul Sorensen
Liisa Ecola
Martin Wachs
Copyright Date: 2012
Published by: RAND Corporation
Pages: 36
  • Cite this Item
  • Book Info
    Mileage-Based User Fees for Transportation Funding
    Book Description:

    This primer presents some promising and innovative mileage fee system designs and transition strategies. For states or localities that are considering a transition to mileage fees, awareness of these strategies can help determine whether shifting from fuel taxes to mileage fees merits further consideration. For jurisdictions already engaged in detailed assessments of mileage fees, these concepts can help reduce costs and build public support.

    eISBN: 978-0-8330-7923-7
    Subjects: Transportation Studies, Technology

Table of Contents

  1. Front Matter
    (pp. 1-1)
  2. Table of Contents
    (pp. 3-3)
  3. Why Mileage Fees, and Why Now?
    (pp. 4-5)

    For much of the past century, federal and state fuel taxes have provided most of the funding for U.S. highway construction and maintenance—and more recently for investments in transit. Generally speaking, because the tax reflects the amount traveled, those who drive the most also pay the most. In addition, fuel taxes are relatively inexpensive to administer and enforce, and offer a modest additional incentive, beyond the underlying price of fuel, to choose vehicles with higher fuel economy.

    But the federal government and most states levy fuel taxes on a cents-per-gallon basis, so real revenues will inevitably decline unless the...

  4. Potential Advantages of Mileage Fees
    (pp. 6-7)

    Mileage fees would be keyed to the amount of vehicle travel rather than to fuel consumption, and this should provide a more stable revenue stream in future decades. Mileage fees offer several additional policy benefits as well. Depending on how the system is implemented, per-mile fees could be structured to alleviate vexing transportation-related problems; improve driver experience through technology-based innovations; and collect detailed, and anonymous, travel data to support better planning and operations....

  5. Technical Design Choices
    (pp. 8-9)

    A mileage-fee system must at minimum be able to accurately meter mileage, collect payment, prevent evasion of fees, and protect driver privacy. Multiple technical options exist for achieving each of these requirements, presenting system planners with a range of considerations....

  6. Innovation in Action
    (pp. 11-13)

    The concept of charging drivers based on travel distance has already been successfully implemented for freight trucks in several European nations, and for both diesel-fueled passenger cars and trucks in New Zealand. Much of the interest in mileage fees within the United States to date has focused on system designs that could apply to passenger vehicles and potentially to trucks as well. Here we briefly describe some of the past and ongoing U.S. trials and initiatives in this vein....

  7. Key Challenges System Cost and Public Acceptance
    (pp. 14-15)

    State and local decisionmakers who consider transitioning from fuel taxes to mileage fees will find themselves confronted by two significant obstacles: potentially high system costs and lack of public acceptance.

    Other challenges—technical, institutional, and operational—are by no means insignificant. Many complexities associated with mileage fees, however, can in principle be resolved through careful policy analysis and detailed system engineering once an implementation decision has been made. In contrast, questions related to cost and public acceptance are fundamental to the calculus of whether it even makes sense—economically or politically—to pursue mileage fees in the first place.


  8. Promising Strategies to Reduce System Cost and Increase Public Support
    (pp. 16-31)

    Planners and policy analysts have been aware for some time now that potentially high system costs and low initial public support represent perhaps the greatest obstacles to shifting from fuel taxes to mileage fees. In response, they have developed an array of innovative system design and transition concepts intended to overcome these two core challenges.

    Drawing on the approaches explored in the recent and ongoing mileage-fee initiatives discussed earlier, we now present 15 promising strategies for reducing system cost and increasing support. As indicated in the summary chart below, system costs as a share of revenue can be lowered by...

  9. Ask the Authors
    (pp. 32-33)

    Rural residents drive farther each year than urban residents, so it seems like rural drivers would be worse off with mileage fees. But typical rural drivers already pay more in fuel taxes than their urban counterparts. Also, rural drivers tend to own larger vehicles with lower fuel economy, so they pay more in fuel taxes for each mile. Assuming that all passenger vehicles pay the same per-mile rate, owners of vehicles with lower fuel economy would pay slightly less in mileage fees than in fuel taxes. On average, then, a flat per-mile fee structure would make rural drivers better off....

  10. Transportation Research at RAND
    (pp. 34-35)
  11. Back Matter
    (pp. 36-36)