As the federal fuel tax continues to diminish, the U.S. Department of Transportation should study state-operated mileage-fee pilot programs to see if they can be scaled up to advance a national policy.
That’s the recommendation from the Government Accountability Office in a new report, which urges the Federal Highway Administration to develop scalability criteria that assesses how state-based pilot programs could inform an expanded national program.
More than a dozen states and two multi-state coalitions are in various stages of piloting alternative funding programs that charge for road use per mile driven. The question is how or whether the state-based programs can inform a national policy, said Elizabeth Repko, the GAO’s director of physical infrastructure.
“The revenues that support the Highway Trust Fund have not been sufficient to pay the federal share of highway and transportation costs for over a decade,” Repko said. “While the systems may work at the state level, the jury is still out as to whether they would work nationwide,” Repko said. The GAO is “recommending that the FWHA establish criteria to assess that.”
Since 2007, the GAO has warned that surface transportation funding is at risk amid a gasoline tax that has remained flat, at 18.4 cents-per-gallon, since 2018, and increasingly fuel-efficient vehicles.
From 2008 to 2021, Congress transferred more than $270 billion into the fund to cover shortfalls from the fuel tax, according to the GAO, which includes surface transportation funding on its “high-risk” list and warns that Congress must find a sustainable long-term funding solution.
The Infrastructure Investment and Jobs Act transferred $118 billion in general revenue to the Highway Trust Fund, which is expected to maintain it through 2026. The IIJA also features a pilot program for a national mileage-based fee program, though that was not evaluated in the new GAO report.
States face the same problem, and while raising taxes to maintain spending, many have also launched mileage-fee programs as a possible alternative.
In 2015, Congress provided funding for states to set up pilot programs for alternative revenues, but the FHWA failed to follow through with criteria to assess whether the pilots could contribute to a national pilot, the GAO said.
“Without scalability criteria, FHWA will not be able to assess the potential of mileage fee systems beyond the pilot states nor provide information or recommendations, if any, for congressional consideration of these approaches to address the current insolvency of the Highway Trust Fund," the GAO said in the report.
The FHWA agrees with the GAO's recommendations, it said in response to the report. "The ability to meaningfully assess scalability has been limited to date by the availability of results from only a limited number of small-scale projects,” U.S. DOT Assistant Secretary Philip McNamara said in the letter. “As pilots continue to progress, additional information should become available to support an assessment,” McNamara said, adding the FHWA would provide a detailed response to the GAO within 180 days.
The GAO also highlighted some of the challenges states have encountered with the mileage fee systems. Among them: drivers' concerns about protecting their privacy and that they would pay more under a per-mile structure than they would with a fuel tax. States have also reported spending more on setting up the program than they've earned from it.
Utah, for example, said its mileage fee system collected about $42,000 from 3,000 participants in 2020, which did not fully cover the overall mileage-fee program costs.
