Study examines usage-based charges to generate road revenue

A new study from the Reason Foundation and the Michigan-based Mackinac Center found that mileage-based user fees, rather than a gas tax, would provide insight into how to rethink the funding of roads in light of diminishing returns to fuel taxes. Baruch Feigenbaum of the Reason Foundation says this model should be tried as a pilot project in Michigan. He talked about the latest episode of the Michigan Department of Transportation’s podcast, Talking Transportation.

“These mileage base usage fees are really, we think, sort of the gold standard of the user pay model, of user benefits, and some of some of the discussions we’ve had with Michigan officials, we’ve had a pretty positive reaction so far,” Feigenbaum said.

Feigenbaum says that with increasingly fuel-efficient vehicles and more electric vehicles on the roads, Michigan and other states will have to think about how they will generate money for the road of fair way.

“One EV driver might drive 5,000 miles a year. Another might drive 20,000 miles, but they pay the same fees. So one of the things we think mileage-based usage fees provide a fair method for all drivers of all vehicles.

Feigenbaum says there is a misconception that rural drivers would pay more than urban drivers, but in reality they would save by comparing a mileage tax with the fuel tax. He notes that most rural drivers have more gas-guzzling vehicles and pay more for gas than urban drivers. He says there is federal money available to do a pilot program in Michigan. However, he thinks it will take at least another decade before a user fee model is fully implemented in the state.

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