Policy Options for Varying Mileage-Based Road User Charges

• Published in: Transportation research record 2008-01, Vol.2079 (1), p.29-36
• Main Author: Forkenbrock, David J.
• Format: Article
• Language: English
• ISSN: 0361-1981; 2169-4052
• DOI: 10.3141/2079-05

Particularly as more fuel-efficient vehicles, hybrids, and eventually vehicles with alternative power, such as hydrogen fuel cells, become increasingly commonplace, the motor fuel tax holds limited promise. As a possible replacement, a mileage-based road user charge has considerable potential as a means of ensuring adequate revenue with which to finance roads at the federal, state, and local levels of government. In addition to providing a stable, reliable revenue stream, a mileage-based road user charge can enable the pursuit of various policy initiatives. A key question is thus how the burden for generating the needed funds should be distributed between various classes of vehicles. The analysis concludes that if the mileage-based road user charge were structured to produce the same total amount of revenue as currently generated by the motor fuel tax, the magnitudes of incentives or disincentives that would be produced for various vehicle classes would be quite small. However, the analysis highlights that the mileage charge could be structured to substantially increase the amount of revenue generated and in the process somewhat increase the incentive to operate more-efficient vehicles. The analysis shows that considerable flexibility exists in how a mileage-based road user charge could be structured to help advance various policy choices while ensuring that the nation's road system would be adequately financed.