As fuel tax revenue falls, states weigh charging by mile
first-in-the-nation initiative, which is run by the state transportation department where her son serves as a survey analyst.
Burroughs’ reluctance exemplifies the myriad hurdles U.S. states face as they experiment with road usage charging programs aimed at one day replacing motor fuel taxes, whose purchasing power is less each year, in part due to inflation, fuel efficiency and the rise of electric cars.
The federal government is about to pilot its own such program, funded by $125 million from the infrastructure measure President Joe Biden signed in November 2021.
So far, only three states — Oregon, Utah and Virginia — are generating revenue from road usage charges, despite the looming threat of an everwidening gap between states’ gas tax proceeds and their transportation budgets.
Hawaii will soon become the fourth. Without action, the gap could reach $67 billion by 2050 due to fuel efficiency alone, Boston-based CDM Smith estimates.
Other ways to tax
Many states have implemented stopgap measures, such as imposing additional taxes or registration fees on electric vehicles and, more recently, adding per-kilowatt-hour taxes to electricity accessed at public charging stations.
Last year, Colorado began adding a 27-cent tax to home deliveries from Amazon and other online retailers to help fund transportation projects. Some states also are testing electronic tolling systems.
But road usage charges — also known as mileagebased user fees, distancebased fees or vehicle-milestraveled taxes — are attracting the bulk of the academic attention, research dollars and legislative activity.
Doug Shinkle, transportation program director at the nonpartisan National Conference of State Legislatures, predicts that after some 20 years of anticipation, more than a decade of pilot projects and years of voluntary participation, making programs mandatory is the next logical step.
“The impetus at this point is less about collecting revenue than about establishing these systems, working out the kinks, getting the public comfortable with it, expanding awareness around it,” he said.
Electric car sales in the U.S. rose from just 0.1% of total car sales in 2011 to 4.6% in 2021, according to the U.S. Bureau of Labor Statistics. S&P Global Mobility forecasts they will make up 40% of the sales by 2030, while other projections are even rosier.
Wrong way to go?
Eric P. Dennis, a transportation analyst at the Citizens Research Council of Michigan, said the failure of states to convert years of research into even one fully functional, mandatory program by now raises questions about whether road usage charging can really work.
“There’s no program design that I have seen that I think can be implemented at scale in a way that is publicly acceptable,” he said. “That doesn’t mean that a program can’t be designed to do so, but I feel like if you can’t even conceive of the program architecture that seems like something that would work, you probably shouldn’t put too much faith in it.”
Indeed, a chicken-andegg dispute over how to proceed in Washington state has stymied road usage charging efforts there.
Lawmakers passed a bill in April that would have begun early steps toward a program by allowing collection of motorists’ odometer readings on a voluntary basis. Democratic Gov. Jay Inslee vetoed the measure, though, arguing that Washington needs a program in place before starting to collect citizens’ personal data.