Emerging Strategies in Mileage-Based User Fees

Abstract

Inflation and improved fuel economy have undermined revenue from federal and state excise taxes on gasoline and diesel; this situation has made it challenging to maintain and expand the nation's road network. With more stringent federal fuel economy standards and the emergence of alternative fuels threatening to accelerate this problem in future years, policymakers have begun to explore mileage-based user fees as a long-term replacement for fuel taxes. Unaffected by fuel type or fuel economy, mileage fees would provide more sustainable revenue, and the system could be structured to promote more efficient use of the roads, offer value-added motorist services, and collect travel data to support better network planning and operations. Mileage fees will likely cost more to administer than will fuel taxes, however, and the concept faces acceptance challenges related to privacy protection and other concerns. These obstacles in turn have spurred great innovation. On the basis of recent studies, trials, and implementation efforts, this paper presents a review of promising mileage-fee design and implementation strategies intended to reduce system costs and foster greater public acceptance.

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