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A mileage-based user fee (MBUF), sometimes called a road user fee (RUF), is based on the "pay for what you use" principle. In most MBUF systems, drivers can choose how they record and report their mileage. These options include: 1) Using technology that records and reports mileage, 2) Manually recording mileage and reporting by using a smart phone, mail-in form, or online submission, and 3) Having mileage recorded during an annual inspection.
Our research has shown that drivers find MBUF technology easy to use, and that the best MBUF programs give drivers a choice in how they report mileage.
No. With a mileage-based user fee (MBUF), the gas tax would be phased out in favor of an approach that allows all drivers to pay their fair share – and allows us to manage the roads we all depend on.
The pay-at-the-pump gas tax started more than 100 years ago. Back then, fuel use was an effective way to figure out how much a driver used the road. But with today's cars going farther on less gas (and some using none), that approach no longer works. An MBUF or RUF offers an opportunity to modernize road funding, while making it more fair and more reliable moving forward.
We worked with a coalition of 17 Eastern states to better understand how to provide strong privacy practices with a mileage-based user fee (MBUF) approach. We learned that providing options for mileage reporting and having strong data protection practices are key to ensuring drivers' privacy with MBUF. You can learn more about these findings here.
When compared to the fuel tax, an MBUF approach (using a revenue-neutral per-mile rate) may save rural drivers money since they tend to drive less fuel-efficient vehicles. Drivers in rural Pennsylvania would see savings of about $34 a year, according to a 2020 analysis by The Eastern Transportation Coalition.
Our work with The Eastern Transportation Coalition (TETC) has shown that the effect on most households is minimal. Depending on how the rate is set, most Pennsylvania households would pay about $0.83 more or less per month with an MBUF versus the current gas tax, which includes a federal and a state tax.
Currently, three states (Oregon, Utah, and Virginia) have MBUF programs.
We are working with a coalition of 17 Eastern states to figure out workable approaches. It is too early to know for sure what will work for Pennsylvania, but options might include collaborating with states in the region to charge out-of-state drivers for miles driven.
The federal and state gas taxes fund state highways and bridges, while counties and towns manage maintenance and new construction for roads under their jurisdiction. If the state gas tax is phased out in favor of a user fee, this would affect funding for state highways and bridges only.
Pennsylvania's overreliance on fuel tax revenue means fuel efficiency impacts our ability to keep up with our aging system and projected traffic increases. In addition to less proportional fuel tax revenue, declining purchasing power impacts how we can invest in our system. We're looking for gas tax alternatives so we can maintain what we have, phase out the outdated gas tax, and plan for the future.
We depend on federal and state gas tax revenue to both build and maintain our roads. As our state continues to grow, it is more important than ever to make sure we can maintain what we have and plan for the future. That is why we have worked with a coalition of Eastern states since 2018 to understand how a gas tax alternative would affect Pennsylvanians. You can learn more about this work here.
PennDOT's highway system is comparable to those of New York, New Jersey and all New England states combined. Our largest single source of revenue for highways and bridges—approximately 75 percent—comes from state and federal gas taxes. These funds are generated every time a driver refills their gas tank in Pennsylvania. However, gas taxes have become a less predictable source of revenue for transportation agencies across the country.
One reason is that as passenger vehicles become more fuel-efficient, and adoption of all-electric vehicles continues to increase, we are seeing reduced revenues at the gas pump, yet these same vehicles contribute the same amount of wear and tear as well as congestion to our roadways. As a result, PennDOT faces an $8.1 billion shortfall in highway and bridge funding annually. In addition, these gas taxes are not indexed to inflation which only adds to the unpredictability of this single largest source of revenue.
An MBUF would align how much a driver uses the road and, therefore, how much they pay for it. This would result in a funding source that is not only fairer and more equitable but also more reliable as it is linked to the amount of travel and associated needs for road and bridge maintenance and expansion projects.
It is very important that no MBUF program add additional steps to the existing commercial vehicle industry's complex regulatory and reporting requirements. The goal is to consolidate taxes and fees into as much of a single structure as possible. There are important distinctions among trucks in terms of business model, weight, size, miles driven, and amount currently paid to support the transportation network that must be considered when making transportation policy decisions affecting the motor carrier industry. PennDOT participated in The Eastern Transportation Coalition's (TETC) various pilot programs in 2018 – 2021 to see how MBUF might affect the trucking industry. The findings for the various TETC Truck Pilot Programs as well as information and insights from its Motor Carrier Working Group found here provide a great resource for how this large segment of road users and payers may be impacted.