An alternative to the diminishing gas and diesel tax would advance under a national mileage-based user fee pilot program featured in the bipartisan infrastructure bill.
The program would mark the first of its kind on the national level. It comes amid rising recognition that state and federal fuel taxes, the chief revenue source for highway funding, are failing to keep up with infrastructure needs.
“I think it’s a big deal,” said Robert Poole, transportation director at Reason Foundation. He said the legislation may be a bit premature as it fails to address key institutional questions such as the roles of states and the trucking industry. “But assuming it passes, it is another building block and it’s better to have it than not to have it,” he said.
For states, the national program is important as state and federal programs will have to learn how to co-exist if the model takes hold, said Ben Husch, federal affairs counsel for natural resources and infrastructure for the National Conference of State Legislatures.
“It’s important, if road usage charges are how we are going to fund transportation infrastructure, to develop state and federal systems that can work together," Husch said.
The national pilot program has bipartisan Congressional support, Husch noted.
The five-year, $25 million national motor vehicle per-mile user fee pilot would ask volunteers to record how many miles they drive and pay fees based on those miles. They would be refunded for the federal gas tax that they have spent for driving those same miles. The money would be sent to the Highway Trust Fund, which accounts for the bulk of federal spending on highway and mass transit projects.
The federal gas tax is 18.4 cents per gallon and 24.4 cents per gallon for diesel, and has been since 1993. The state average is 30.63 cents for gas and 32.29 cents for diesel, according to the U.S. Energy Information Administration.
Federal fuel taxes have fallen steadily over the last 10 years amid the growth of fuel-efficient and electric cars, forcing the Highway Trust Fund to increasingly rely on transfers from the Treasury’s general fund, according to the Congressional Budget Office.
States are facing the same problem, and in response many have launched studies into mileage-based user fee programs, said Douglas Shinkle, transportation program director of the National Conference of State Legislatures.
“There’s a pretty widescale recognition that the gas tax just isn’t going to work over the long term,” Shinkle said. “Legislatures are recognizing that they need to respond to the decline.”
Federal support for state-based programs was included in the 2015 infrastructure act.
Oregon and Utah are the only two states with fully functioning mileage-based user fee programs, though dozens of states are in the midst of studying or piloting similar proposals. Virginia is expected to become the third state with a full program by next summer. The state will be closely watched as it's more populated and handles more interstate travel than Oregon and Utah, said Shinkle.
Of the 15 states that considered mileage-based user fee bills this year, four were enacted, he said. The most significant was in California, which is studying not only how to replace gas taxes but also help reduce greenhouse gases.
Relying on a user fee is a tried and true infrastructure finance principle, according to Poole, who said he’s participated in state-based pilots in the past and will probably volunteer for the national program if it’s approved.
“The user-fee principal is the basis of the gas tax originally,” Poole said. “I think a big challenge in replacing the fuel taxes is to retain that important principle and make sure it doesn’t get lost in some way.”
