Bonds

As states and the federal government grapple with ways to replace or complement the diminishing gas tax, the idea of a per-mile user fee has gained public support over the last decade.

That’s according to the latest annual survey from the Mineta Transportation Institute, based at San Jose State University, which for the last 15 years has gauged public support for federal tax options to support transportation.

Support for a flat-rate mileage fee has grown to 39% in 2024 from 22% in 2010. The backing grew to 51% when the fees, also called a road user charges, vary based on a vehicle’s pollution emissions, the so-called green version, or income.  

“Public support for a mileage fee depends on the details of how the fee is structured,” study co-author Asha Weinstein Agrawal, said in a statement.

More people are supporting a per-mile user fee as electric vehicles become more common and the federal gas tax fails to keep pace with the growing needs of the Highway Trust Fund.

More than half of the respondents supported a “business road-use fee” that would be charged to deliver and freight trucks, with 58% supporting it, or ride-hailing vehicles, which 53% backed, Agrawal said.

And 64% of respondents supported lower mileage-fee rates for low-income drivers.

“The survey findings suggest that the public may be willing to support both higher fuel taxes or the adoption of mileage fees,” the paper said. “However, the specifics of the proposal will significantly impact support.”

The survey comes as the Highway Trust Fund, which supports more than 90% of formula transportation funds sent to states, in on track to insolvency by 2027, according to the Congressional Budget Office. The fund’s main revenue, the federal gas and diesel tax, has not been raised in decades and has failed to keep up with the HTF’s programs since 2008.

The rise of electric vehicles, more fuel-efficient cars and inflation are shrinking the pool of dollars every year. The transition to EVs is a key energy goal for President Joe Biden, who wants half of all new cars to be electric by 2030. 

The survey found that only 2% of respondents knew that the federal gas tax rate has not been raised in more than 20 years and that 74% supported increasing the federal gas tax by 10 cents per gallon if the revenue would be dedicated to maintenance of streets and highways.

Congress, which has held several hearings on the Highway Trust Fund, may consider revenue sources like mileage fees as it tackles the next surface transportation bill, when the Infrastructure Investment and Jobs Act expires in 2026.

The IIJA established a pilot national motor vehicle per-mile user fee program and funded grant programs for state-level user fee programs.

Since 2012, 31 states have approved plans to increase revenue through additional bonds, fuel taxes, vehicle registration fees, and tolling, noted Rep. Rick Larsen, D-Wash., during a House hearing on the Highway Trust Fund last October. And at least 33 states assess annual EV fees, ranging from $50 to $225.

“To be clear, electric vehicles are not the cause of today’s Trust Fund insolvency — but as they become more prevalent, Congress will need to decide how to incorporate them if we retain a user-pays system,” Larsen said.

Transportation and issuer groups have also expressed support for Republican-backed Stop EV Freeloading Act, which would require electric vehicle owners to pay a fee to help support the struggling Highway Trust Fund.

Articles You May Like

What the stock market typically does after the U.S. election, according to history
Trump asks arch protectionist Robert Lighthizer to run US trade policy
California voters say ‘yes’ to more than $40 billion of local school bonds
Cost of lead pipe removals weighs heavily on the Midwest
Top Wall Street analysts are confident about the long-term potential of these 3 stocks