Mileage-Based User Fee

 

 

Mileage-Based User Fee

Advancements in technologies enabling greater use of electric or alternative fuel vehicles will continue to impact gas tax revenues. The U.S. Energy Information Agency estimates that fuel efficiency for all light-duty vehicles (cars and light trucks) will steadily increase, from an average weighted MPG of just over 20 in 2010 to over 36 in 2040. The fuel efficiency of freight trucks also is expected to improve, although at a slower rate, from an average weighted MPG of over 6 in 2010 to over 8 in 2040. This projection assumes there is not a major paradigm shift in vehicle fuel technology, such as affordable electric cars or hybrid heavy-duty trucks. It also assumes no shift will occur in public policy or public attitudes that encourage people to reduce their long-term travel habits or shift to more efficient vehicles more quickly. Given the growing concern about climate protection and fuel price volatility, however, such changes are likely, which would lead to a more rapid deterioration in the long-term viability of the current fuel tax.
 
SCAG projections indicate that the total number of vehicle miles traveled in the SCAG region will increase by about 16 percent by 2035. The National Surface Transportation Infrastructure Financing Commission also predicts an increase in VMT nationwide. The Financing Commission evaluated a combination of short- and long-term factors, identifying that short-term motor fuel price volatility combined with a weak economy could have a considerable negative impact. They indicate that despite a recent national decline in VMT, travel growth nationally will resume a trajectory of about 1.5 to 1.8 percent per year for the foreseeable future due to factors such as population growth, economic growth, and land use patterns. Accordingly, the Financing Commissions’ findings and recommendations indicate that the most viable approach to efficiently fund investments in transportation in the medium to long run will be a user charge system based more directly on miles driven (and potentially on factors such as time of day, type of road, vehicle weight, and fuel economy) rather than indirectly on fuel consumed. Additionally, the National Surface Transportation Policy and Revenue Study Commission identified consistent findings and recommendations.
 
SCAG supports further research, development, and demonstration of mileage-based user fees specific to the Southern California context.  SCAG is exploring partnerships with automobile manufacturers and technology developers, and local/regional business leaders in the development of a strategic action plan and initial demonstration framework.