As we continue our commitment to phasing out the gas tax, PennDOT is looking to new, more equitable and innovative ways to fund transportation infrastructure needs. Mileage-Based User Fees (MBUF), also known as Road-User Fees (RUF), refers to charging drivers by the number of miles they travel – not by the amount of gas they buy and use.
To explore this funding option—and contribute to the national conversation on it—PennDOT in partnership with The Eastern Transportation Coalition (TETC) a coalition of 17 states and Washington, D.C., is working to better understand how drivers view this alternative funding mechanism and its impacts.
PennDOT has participated in numerous TETC studies and surveys over the past several years to assess the potential benefits to Pennsylvanians of an MBUF model. For TETC's state passenger vehicle pilot, more than 500 Pennsylvanians participated along with drivers from Delaware, New Jersey, and North Carolina.
Electric Vehicle Use on the Rise
Another reason Pennsylvania and other states are increasingly focused on MBUF/RUF is rapidly changing market and consumer choices with vehicle types. With advances in fuel efficiency and the popularity of alternative fuel vehicles increasing in recent years, gas tax revenue is trending downward and is expected to continue to do so. In Pennsylvania, the number of registered EV (Electric Vehicles) increased 320% between March 2019 and September 2022.
Moreover, automobile manufacturers are committed to offering fully electric fleets in the near future:
Rural Drivers Could Save With MBUF
While there is an early focus on EV or alternate-fuel vehicles, all types of drivers need to be considered. In its partnership with TETC, Pennsylvania focused on rural drivers, logging 226,267 miles over four months with over 14 states traveled. TETC's latest report on its pilot program found rural drivers in Pennsylvania could potentially save $34 a year on average using an MBUF model – depending on the rate – because they tend to drive less fuel-efficient vehicles. Motorists with more efficient vehicles are currently paying less in gas tax on a per-mile basis than those with less fuel-efficient vehicles. With MBUF, everyone would pay the same amount per mile travelled.
Studying the Best MBUF Approaches for Trucks
PennDOT also has been participating in TETC pilot programs to learn about the unique perspective and needs of the trucking industry to alternative transportation funding policies. The multi-state truck pilots show that one rate for all trucks does not work because of the vast differences in vehicle operations, types, ages, performance, and mileage travelled. Sharing results from the pilots and highlighting key differences between trucks and passenger cars help reduce misinformation about motor carriers and will help the industry to craft an acceptable approach to MBUF that considers their interests.
For example, PennDOT is part of a Phase 4 Pilot examining the best way to enable MBUF technologies for commercial trucks. The study has 1,434 participants and looks at four types of measurement devices over 3,421,216 miles, in 37 states plus Canada. The results will help to determine which type of device is the most useful for a variety of trucks over specific distances.
MBUF Activity Across the Country
A widespread need for new transportation funding sources has raised the issue to the national level. In fact, Oregon and Utah already have MBUF programs in place and Georgia has proposed conducting their own pilot study like TETC's.
Additionally in July 2022, Virginia launched its Mileage Choice program where participants can volunteer to pay a fee for the miles they drive. As more states face the same funding challenges, solutions like MBUF will continue to become more prominent in conversations and testing. For example, the Washington State Transportation Commission (WSTC) recommended to state legislators to replace the state's gas tax with a road usage charge (RUC) during their December 2022 meeting.
The Federal Highway Administration is encouraging states to consider MBUF and other user-pay approaches through its Surface Transportation System Funding Alternatives (STSFA) program, which in 2021 announced $18.7 million in grants to eight projects. They include:
For more information on transportation funding challenges broughtabout by market forces including but not limited to increased adoption of hybrid and electric vehicles, cultural shifts in travel habits, inflation and the reduced buying power that results from it, visit www.penndot.pa.gov/funding.
To get the latest news about PennDOT's alternative transportation funding, visit our Contact Us page to subscribe to the PennDOT Pathways newsletter.