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As fuel taxes plummet, states weigh charging by the mile instead of the tank

  By JULIE CARR SMYTHJune 26, 2023 GMT
  1 of 1
  Evan Burroughs, who touts the virtues of an Oregon pilot program that
  charges motorists by the distance their vehicle travels rather than the
  gas it uses, displays a tracking device the program uses, in Salem,
  Ore., on Wednesday June 21, 2023. U.S. states are experimenting with
  road usage charging programs aimed at one day replacing motor fuel
  taxes, which are generating less each year, in part due to fuel
  efficiency and the rise of electric cars. (AP Photo/Andrew Selsky)
  1 of 1
  Evan Burroughs, who touts the virtues of an Oregon pilot program that
  charges motorists by the distance their vehicle travels rather than the
  gas it uses, displays a tracking device the program uses, in Salem,
  Ore., on Wednesday June 21, 2023. U.S. states are experimenting with
  road usage charging programs aimed at one day replacing motor fuel
  taxes, which are generating less each year, in part due to fuel
  efficiency and the rise of electric cars. (AP Photo/Andrew Selsky)

  COLUMBUS, Ohio (AP) — Evan Burroughs has spent eight years touting the
  virtues of an Oregon pilot program charging motorists by the distance
  their vehicle travels rather than the gas it guzzles, yet his own
  mother still hasn’t bought in.

  Margaret Burroughs, 85, said she has no intention of inserting a
  tracking device on her Nissan Murano to record the miles she drives to
  get groceries or attend needlepoint meetings. She figures it’s far less
  hassle to just pay at the pump, as Americans have done for more than a
  century.

  “It’s probably a good thing, but on top of everybody else’s stress
  today, it’s just one more thing,” she said of Oregon’s
  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
  [82]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 [83]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
  ever-widening 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.

  Many states have implemented stopgap measures, such as imposing
  [84]additional taxes or registration fees on [85]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 [86]electronic tolling systems.

  But road usage charges — also known as mileage-based user fees,
  distance-based fees or vehicle-miles-traveled 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.

  Patricia Hendren, executive director of the Eastern Transportation
  Coalition, said figuring out how to account for multistate trips is
  particularly important in the eastern U.S., where states are smaller
  and closer together than those in the West. Virginia’s program,
  launched in 2022, is already the largest in the nation and will provide
  valuable lessons, she said.

  Hendren’s organization, a 17-state partnership that researches
  transportation safety and technology innovations, participated in one
  of the earliest pilot projects and eight others since. The biggest
  hurdle, she said, is to inform the public about the diminishing returns
  from the gas tax that has long paid for roads.

  “This is about the relationship between the people who are using our
  roads and bridges and how we’re paying for it,” Hendren said. “We’ve
  been doing it one way for 100 years, and that way is not going to work
  anymore.”

  Eric Paul 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-and-egg 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.

  States also must grapple with the social and environmental implications
  of their plans for replacing the gas tax, said Asha Weinstein Agrawal,
  director of the National Transportation Finance Center at San Jose
  State University’s Mineta Transportation Institute.

  The institute has conducted national surveys every year since 2010 and
  found growing support for mileage-based fees, special rates for
  low-income drivers and rates tied to how much pollution a vehicle
  generates, she said.

  Weinstein Agrawal said public policy, and the way transportation is
  funded, often fails to reflect states’ growing emphasis on curbing
  carbon emissions as a way to deal with climate change.

  “To switch over to a system that makes it cheaper to drive a gas
  guzzler and more expensive to drive a Prius,” she said, “seems both
  symbolically problematic and to be sending, in the most literal way,
  the wrong economic incentives to people.”

  Evan Burroughs said his 85-year-old father, Hank, who drives an
  electric car, avoids paying significant vehicle registration fees by
  participating in Oregon’s program, while Burroughs himself has paid an
  extra dollar or two each month for his Subaru Outback.

  “To me, that’s worth it to be part of the experiment,” he said, “and to
  know I’m paying my fair share for the roads.”

  ___

  This story was first published on June 25, 2023. It was updated on June
  26, 2023, to correct a comment from Douglas Shinkle of the National
  Conference of State Legislatures. He said mandatory road usage charging
  is the next logical step, not that states need to make the charges
  mandatory.

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