DALLAS -- A vehicle-miles-traveled road fee is the best solution to replace the declining gasoline tax for future transportation funding as well as the most unpopular revenue option by a wide margin, according to researchers at Indiana University in two separate studies.
The drop in gasoline tax revenues is inevitable as vehicles become more fuel efficient and the fleet of electric vehicles grows, they said.
However, a recent IU survey of 2,000 motorists also found that opponents of mileage-based user fees outnumber supporters by 4 to 1 and are more likely to take action to prevent the fees from being implemented. The opposition is even greater if GPS-style devices are used to track mileage rather than self-reporting or odometer inspections.
"It's safe to conclude the intensity of the opposition is quite high," said Denvil Duncan, an associate professor at IU and lead author of the mileage tax survey. "The relative intensity with which opponents hold their views suggests it will be quite difficult to generate public consensus in favor of adopting mileage user fees in the near future."
The IU survey found that about 20% of drivers would be willing to pay fees based on odometer readings but only 13% favor the use of vehicle-mounted GPS devices supplied by the government to measure miles traveled.
"If drivers could select the method used to track vehicle miles traveled, their privacy concerns might be minimized and the fee marginally more popular," Duncan said.
Roughly two-thirds of the motorists surveyed do not believe roads should be financed under a user-pays principle, whether it is a fuel tax or mileage fee, he said.
"It will take political courage to support a mileage user fee," Duncan said. "The political gamesmanship that often surrounds tax policy reforms is likely to favor opponents."
That's bad news for states looking to preserve their gasoline tax as the prime source for highway funding, said Jerome Dumortier, an assistant professor at IU and co-author of the revenue-options study that will be published in January.
"Our results indicate that although a mileage fee is politically and technologically difficult to achieve, it is the only measure that avoids a declining tax revenue in the long run," Dumortier said.
Revenue generated by fuel taxes that are levied at a fixed per-gallon rate is increasingly inadequate due mainly to an increase in fuel economy and inflation in highway construction costs, he said.
States with a per-gallon gasoline tax that is not linked to inflation can expect a drop of up to 50.5% in fuel tax revenues by 2040 with a 16% revenue drop in states with taxes that are adjusted regularly to inflation, Dumortier said.
U.S. motorists consumed 179 billion gallons of gasoline in 2015, generating state fuel tax revenues of more than $41.5 billion, according to the latest information from the Federal Highway Administration. Fuel consumption in the first half of 2016 totaled 71.8 billion gallons, the FHWA said.
Replacing the state gasoline tax with a per-mile fee would increase transportation tax revenues by up to 101% by 2040 in states that currently do not adjust their gasoline tax for inflation or impose sales taxes on motor fuels, Dumortier said.
"The conclusion that the U.S. surface transportation system will gradually deteriorate without a new or additional dedicated source of transportation funding is universal," he said.
The increasing number of electric vehicles in California will cut the state's gasoline tax revenues by $3 billion through fiscal 2030, according to a report this week from Moody's Investors Service. California's fuel taxes currently generate $2.3 billion per year.
Electric vehicles account for between 6% and 20% of all cars sold in 30 California counties, said Julius Vizner, an assistant vice president at Moody's.
"We see California adjusting its tax or spending policies to compensate for any decline in tax revenues related to fuel usage," Vizner said.
