Mileage Fee System Possible By 2015, RAND Corp. Says

WASHINGTON — A mileage-based revenue system to fund federally assisted transportation projects could be implemented within about five years, the RAND Corp. said in a report released online last week.

The 151-page report suggested there are three different systems for calculating vehicle miles traveled, or VMT, fees that could be ready to go by 2015: a global positioning system device, a cellular device connected to the vehicle, or a system of metering mileage based on fuel consumption.

“Many potential VMT metering and charging systems could, from a technical perspective, be implemented within a few years,” the report said.

However, “VMT fees face two significant policy obstacles: first, it is not apparent that initial efforts to institute VMT fees, or subsequent efforts to increase VMT fees to keep pace with inflation, will face less opposition than increasing fuel taxes; and second, the administration of VMT fees will almost certainly be more costly and burdensome than fuel tax collection.”

Transportation advocates and several commissions and reports have argued for moving toward a different revenue source than gas taxes. Most say the public sector should move toward a system of VMT fees, but there is no consensus on whether to move ahead with that change now, to proceed with pilot projects, or to delay a shift to VMT fees until the economy is stable.

But some states, such as Oregon, have already begun pilot projects to collect revenue based on mileage.

The RAND researchers looked at options that could be implemented by 2015, which would take less time than waiting for auto manufacturers to start putting metering equipment in all vehicles.

The report noted that “there are also significant uncertainties that make it difficult to determine the optimal configuration at this juncture.” But the upcoming multi-year transportation bill is “the opportunity” for lawmakers to test different methods and start the wheels turning on a VMT program that would begin in 2015, the report said.

The research comes as lawmakers in the Senate and the Obama administration push to delay decisions on the future of highway funding. Legislation that could be a starting point for a new funding mechanism has been stalled since last year in the House Transportation and Infrastructure Committee, partly because the committee is awaiting revenue provisions from the House Ways and Means Committee.

The Senate jobs legislation that Senate Majority Leader Harry Reid, D-Nev., floated last week would further delay the process, extending the current program through the end of this year.

Gasoline and diesel fuel taxes currently provide most of the funding for federal and state transportation projects. Though tax rates per gallon of fuel have been periodically adjusted to help governments raise more revenue to pay for maintenance and construction, the current federal rates — 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel — are not pegged to inflation. In addition, hybrid cars and a decline in vehicle travel have eaten away at fuel-tax revenue.

The study was requested by the American Association of State Highway and Transportation Officials, and was conducted as part of a National Cooperative Highway Research Program project that is supported by state departments of transportation.

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