Transportation Agency Funding Mechanisms

Overview

Transportation funding mechanisms have traditionally depended on the fuel tax to fund transportation infrastructure projects. As more passenger cars begin to run on electricity and become more fuel efficient, transportation agencies receive less funding to maintain and build transportation infrastructure. Current alternative funding mechanisms to funding transportation infrastructure projects include: a vehicles mile travelled (VMT) fee, congestion pricing, and a weight-mile tax. These funding mechanisms aim to address the growing disparities in funding by having users pay on a per mile basis, pay to drive on congested roads, or pay to drive larger vehicles on roadway networks.

VMT fees are distance-based fees for passenger vehicle users on defined roadways. Congestion pricing refers to having varying costs to drive on a roadway depending on traffic levels. High traffic results in a higher price to drive on the road, the fee structure seeks to limit demand on a roadway system. The weight-mile tax is for larger vehicles, where a tax is imposed on the vehicles on a per mile basis when operative in an area where the tax is used. The weight-mile tax seeks to have larger vehicles pay more due to their larger impact on the roadways.

VMT fee

VMT fees are distance-based fees for passenger vehicle users on defined roadways. VMT fees operate on a per mile basis where operators pay the fee at a fuel station, charge points, by mail, or online. Oregon currently has a implemented a VMT fee system, OReGO which operates on a volunteer basis. OReGo was launched in 2015, where the Oregon Legislature directed ODOT to deposit all net OReGo revenue into the State Highway Fund. The State Highway Fund is used to fund the construction and maintenance of roadways, bridges, and rest areas in the state of Oregon. OReGo participants pay 1.8 cents per mile on Oregon roads, and participants are partially reimbursed for the fuel tax2.

California has also piloted a VMT fee based system with the California Road Charge Pilot Program (RCPP). RCPP was developed, deployed, and evaluated by Caltrans, the California state department of transportation to study an alternative to the fuel tax. The RCPP was a 9 month pilot program from July 2016 to March 2017 including more than 5000 volunteers who drove more than 37 million miles. The RCPP gave participants the option of reporting mileage through a time permit, mileage permit, odometer charge, automated distance reporting with no location, and automated distance reporting with general location. RCPP partipcants paid 1.8 cents per mile fuel charge for light vehicles and 1.8 cents per mile for heavy diesel vehicles. The pilot found 61% of volunteers were very satisfied with the concept of a VMT charge. Results of the RCPP can be found here.

Results of the RCPP Pilot volunteer satisfaction

Timeline

• 2013 - Oregon passes Senate Bill 810, establishing the first road usage charge program for personal vehicles in the United States
• 2015 - The first phase of Oregon Senate Bill 810 pay-per-mile program, OReGO is launched and limited to 5,000 personal vehicles
• 2015 – Fixing America’s Surface Transportation (FAST) Act was passed, establishing a five-year, $95 million Surface Transportation System Funding Alternatives (STSFA) Program to investigate alternative revenue funding mechanisms
• 2016 - Caltrans deploys statewide road charge field trial for nine months
• 2019 – OreGo is expanded to unlimited personal vehicles, additional Oregon legislation is passed to exempt electric vehicles and vehicles getting 40+ mpg from mpg-based registration fee

Case Studies

• Oregon’s VMT fee system, OReGo was launched in 2015, where all net OReGo revenue into the State Highway Fund. OReGo participants pay 1.8 cents per mile on Oregon roads, and participants are partially reimbursed for the fuel tax2.
• California Road Charge Pilot – Caltrans deployed a nine month VMT fee trial from July 1,2016 to March 31,2017. The study included more than 5,000 volunteers who drove more than 37 million miles. 61% of volunteers were very satisfied with the concept of a VMT charge.

Congestion Pricing

Overview of topic goes here. More research can be done but the UCLA transit wiki article provides a really good introduction and explanation of the topic and can be found here.

Weight-Mile Tax

A weight tax has targeted larger vehicles due to their impact on the roadway system. A federal tax has been in use for vehicles weighing more than 55,000 pounds, the Heavy Vehicle Use Tax (HVUT) is a flat tax. Oregon, New Mexico, Kentucky, and New York have imposed a tax per mile on larger vehicles travelling within their state lines.

Weight, weather, and traction devices cause the majority of road damage, by creating policy taxing vehicles by weight it allows the vehicles who cause more harm to roadways to pay a more “fair” share in funding projects than just a fuel tax. Having the weight tax be mile based also ensures the users are paying a more fair share for the extra burden on the roadways.

“Players in the Field”

• Oregon
• New Meixco
• Kentucky
• New York