Transportation & Vehicle Safety Policy

Mileage-Based Road User Charges

Forkenbrock, D.J.; Hanley, P.F.

Abstract

As vehicles evolve and burn less fuel, fees assessed for the number of miles actually traveled may prove to be a stable, efficient, and equitable way to finance roads in the United States.

For almost a century, the motor fuel tax has been the mainstay of highway finance in the United States. This method has the advantage of being roughly proportional to the distance traveled and thus has the desirable attribute of being a pay-as-you-go form of user charge. In several important dimensions, however, motor fuel taxes may not be entirely satisfactory.

In future years, the revenue-generating capacity of the motor fuel tax will be at best problematic. The U.S. Department of Energy predicts that fuel efficiency will improve substantially through 2025, with automobiles achieving nearly 13 kilometers per liter (30 miles per gallon) on average in that year. The California Air Resources Board and the National Research Council also predict substantial improvements in fuel efficiency for the vehicle fleet by 2015 to 2020. Absent substantial increases in fuel tax rates per gallon, receipts are not likely to keep pace with costs.