Discussion: View Thread

Great to see the ASCE membership contribute to the current dialogue on the pros and cons of using a mileage based fee (aka VMT fee) to collect revenue to support transportation services. Special thanks to Aaron Frits for initiating the dialogue. A lot of very good points have been made. We at the UMass Transportation Center have been involved in transportation finance related research for more than 10 years including projects regarding the use of a mileage based fee. Here are a few observations based on our research.

1. There is no shortage of opinions on the advantages and disadvantages of using a mileage based fee to collect (and not to collect) revenue to support transportation services.
2. When considering the use of a mileage based fee to collect revenue to support transportation services we suggest that it be referred to as a “fee” rather than a “tax” when you view it as a “user charge for transportation services rendered”. A Washington D.C. based group, the Mileage Based User Fee Alliance, has been promoting the use of the term “mileage based user fee” (MBUF) to describe what many refer to as a VMT fee.
3. While researchers, engineers, legal experts, policymakers, stakeholder groups, and others sort out issues and challenges related to establishing a mileage based user fee and as they test various technologies to collect the fee from road users, we should continue to consider other sources of revenues - both user and non-user based - (see https://ideas.repec.org/a/taf/transp/v39y2016i3p239-253.html) including placing mileage based tolls on roads with full control of access (e.g. interstates) that are not currently tolled. While the widespread use of tolls on interstates will likely require an act of Congress, such tolls can be collected easily with existing technologies and without traditional toll plazas which are expensive to build and operate and can significantly reduce the roadway capacity. In addition to generating needed revenue to support transportation investments, such tolls will enhance the public’s understanding of mileage based user fees and perhaps help the transportation community get greater public acceptance and policy makers’ support of mileage based fees using advanced technologies.
4. On March 16 at the New Zealand Embassy in Washington D.C. the Mileage Based User Fee Alliance is holding the 4^th Annual National Conference on “What, Where, and How” of implementing a mileage based fees using advanced technologies. Included will be presentations on the FAST Act Section 6020 grants and current state pilots mentioned by Laura Hale. For further details see http://www.mbufa.org/
5. As we think about innovative ways to collect revenues to support transportation services fairly and efficiently, we also need to consider ways of reducing capital and operating costs incurred in the provision of services.

I agree that there must be SOME way to better capture the cost associated with use, wear, and tear on roads. In a recent Wired article, Michael Manville, an assistant professor of urban planning UCLA, made what I thought is a pretty powerful statement about why we need a solution to the inadequate gas tax:

"Roads are basically the only infrastructure we have that we experience daily shortages of... We don’t have rolling blackouts, the toilets don’t back up twice a day, and that’s not because the technology in those things is so much better. We just don’t give them away for free.”

As far as cost model efficiency is concerned, VMT is comparable to that of other infrastructure rate systems such as water ($/GPD), electricity ($/kWH), gas ($/therm), etc. A surcharge for vehicle weight makes sense too, as that's often a component of freight calculations and is directly correlated with the intensity of roadway damage. As the old saying goes, if it ain't broke...

From a behavioral economics standpoint, the best way to strike a balance between maximum participation and freedom of choice is an opt-out or 'presumed consent' system; a 'mandated choice' system could be used as well. Drivers would automatically be chosen ('presumed consent') or be required to choose registration for ('mandated choice') tracking VMT when they license/register their vehicle or when they acquire vehicle insurance. Both systems are statistically proven to increase participation. For users who opt-out in either system, registration fees or higher insurance premiums could be used to make up the difference, using an average VMT calculated through similar user and vehicle demographics.

I see where privacy is a concern, but most folks are already regularly tracked (whether they know it or not!) by the MAC or Bluetooth addresses of the vehicles/devices. Services like Google and Waze anonymize and aggregate data, 'dumping' sensitive information. People don't seem to mind if their personal location is contributing to traffic data that makes their commute smoother, or if it allows targeted advertising that provide local tips and discounts. It can be done, but it's a matter of cultural acceptance - no easy feat!

Keep in mind as well that expensive public infrastructure is OKAY so long as there is enough private investment linked directly to its upkeep - by some estimates, municipalities need a 20:1 private to public investment ratio to keep infrastructure investments solvent. VMT and weight surcharges may indeed relieve the costs of highways and suburban roadways that aren't lined with lots of tax-contributing property owners whose property/business investment can help with upkeep. In urban environments, infrastructure costs should be handled by land development patterns that profit the local economy (regardless of density), coupled with congestion pricing for the vehicles that DO contribute to infrastructure life cycle costs.

I agree that there must be SOME way to better capture the cost associated with use, wear, and tear on roads. In a recent Wired article, Michael Manville, an assistant professor of urban planning UCLA, made what I thought is a pretty powerful statement about why we need a solution to the inadequate gas tax:

"Roads are basically the only infrastructure we have that we experience daily shortages of... We don’t have rolling blackouts, the toilets don’t back up twice a day, and that’s not because the technology in those things is so much better. We just don’t give them away for free.”

As far as cost model efficiency is concerned, VMT is comparable to that of other infrastructure rate systems such as water ($/GPD), electricity ($/kWH), gas ($/therm), etc. A surcharge for vehicle weight makes sense too, as that's often a component of freight calculations and is directly correlated with the intensity of roadway damage. As the old saying goes, if it ain't broke...

From a behavioral economics standpoint, the best way to strike a balance between maximum participation and freedom of choice is an opt-out or 'presumed consent' system; a 'mandated choice' system could be used as well. Drivers would automatically be chosen ('presumed consent') or be required to choose registration for ('mandated choice') tracking VMT when they license/register their vehicle or when they acquire vehicle insurance. Both systems are statistically proven to increase participation. For users who opt-out in either system, registration fees or higher insurance premiums could be used to make up the difference, using an average VMT calculated through similar user and vehicle demographics.

I see where privacy is a concern, but most folks are already regularly tracked (whether they know it or not!) by the MAC or Bluetooth addresses of the vehicles/devices. Services like Google and Waze anonymize and aggregate data, 'dumping' sensitive information. People don't seem to mind if their personal location is contributing to traffic data that makes their commute smoother, or if it allows targeted advertising that provide local tips and discounts. It can be done, but it's a matter of cultural acceptance - no easy feat!

Keep in mind as well that expensive public infrastructure is OKAY so long as there is enough private investment linked directly to its upkeep - by some estimates, municipalities need a 20:1 private to public investment ratio to keep infrastructure investments solvent. VMT and weight surcharges may indeed relieve the costs of highways and suburban roadways that aren't lined with lots of tax-contributing property owners whose property/business investment can help with upkeep. In urban environments, infrastructure costs should be handled by land development patterns that profit the local economy (regardless of density), coupled with congestion pricing for the vehicles that DO contribute to infrastructure life cycle costs.

I agree that there must be SOME way to better capture the cost associated with use, wear, and tear on roads. In a recent Wired article, Michael Manville, an assistant professor of urban planning UCLA, made what I thought is a pretty powerful statement about why we need a solution to the inadequate gas tax:

"Roads are basically the only infrastructure we have that we experience daily shortages of... We don’t have rolling blackouts, the toilets don’t back up twice a day, and that’s not because the technology in those things is so much better. We just don’t give them away for free.”

As far as cost model efficiency is concerned, VMT is comparable to that of other infrastructure rate systems such as water ($/GPD), electricity ($/kWH), gas ($/therm), etc. A surcharge for vehicle weight makes sense too, as that's often a component of freight calculations and is directly correlated with the intensity of roadway damage. As the old saying goes, if it ain't broke...

From a behavioral economics standpoint, the best way to strike a balance between maximum participation and freedom of choice is an opt-out or 'presumed consent' system; a 'mandated choice' system could be used as well. Drivers would automatically be chosen ('presumed consent') or be required to choose registration for ('mandated choice') tracking VMT when they license/register their vehicle or when they acquire vehicle insurance. Both systems are statistically proven to increase participation. For users who opt-out in either system, registration fees or higher insurance premiums could be used to make up the difference, using an average VMT calculated through similar user and vehicle demographics.

I see where privacy is a concern, but most folks are already regularly tracked (whether they know it or not!) by the MAC or Bluetooth addresses of the vehicles/devices. Services like Google and Waze anonymize and aggregate data, 'dumping' sensitive information. People don't seem to mind if their personal location is contributing to traffic data that makes their commute smoother, or if it allows targeted advertising that provide local tips and discounts. It can be done, but it's a matter of cultural acceptance - no easy feat!

Keep in mind as well that expensive public infrastructure is OKAY so long as there is enough private investment linked directly to its upkeep - by some estimates, municipalities need a 20:1 private to public investment ratio to keep infrastructure investments solvent. VMT and weight surcharges may indeed relieve the costs of highways and suburban roadways that aren't lined with lots of tax-contributing property owners whose property/business investment can help with upkeep. In urban environments, infrastructure costs should be handled by land development patterns that profit the local economy (regardless of density), coupled with congestion pricing for the vehicles that DO contribute to infrastructure life cycle costs.

VMT methods of raising money for roads and bridges are inefficient and only help the government build bigger databases about its citizens.  It also will start a whole new "industry" of cheating on the data (like air quality data, etc.).  The gas tax is relatively efficient because it's collected on the wholesale level.  Fuel retailers,  auto-makers, and the consumer don't have to be involved.  And, there's is no huge government agencies collecting data and sending out bills.

If there are going to vehicles that don't use gas or diesel, then work up a separate method for them alone, or have them pay a set amount per year.  Don't swipe the vast majority of vehicle into this government nightmare.  And, don't penalize those who have fuel-efficient vehicle with the same fee-level as gas-guzzlers.  Doesn't make any sense.

I agree that there must be SOME way to better capture the cost associated with use, wear, and tear on roads. In a recent Wired article, Michael Manville, an assistant professor of urban planning UCLA, made what I thought is a pretty powerful statement about why we need a solution to the inadequate gas tax:

"Roads are basically the only infrastructure we have that we experience daily shortages of... We don’t have rolling blackouts, the toilets don’t back up twice a day, and that’s not because the technology in those things is so much better. We just don’t give them away for free.”

As far as cost model efficiency is concerned, VMT is comparable to that of other infrastructure rate systems such as water ($/GPD), electricity ($/kWH), gas ($/therm), etc. A surcharge for vehicle weight makes sense too, as that's often a component of freight calculations and is directly correlated with the intensity of roadway damage. As the old saying goes, if it ain't broke...

From a behavioral economics standpoint, the best way to strike a balance between maximum participation and freedom of choice is an opt-out or 'presumed consent' system; a 'mandated choice' system could be used as well. Drivers would automatically be chosen ('presumed consent') or be required to choose registration for ('mandated choice') tracking VMT when they license/register their vehicle or when they acquire vehicle insurance. Both systems are statistically proven to increase participation. For users who opt-out in either system, registration fees or higher insurance premiums could be used to make up the difference, using an average VMT calculated through similar user and vehicle demographics.

I see where privacy is a concern, but most folks are already regularly tracked (whether they know it or not!) by the MAC or Bluetooth addresses of the vehicles/devices. Services like Google and Waze anonymize and aggregate data, 'dumping' sensitive information. People don't seem to mind if their personal location is contributing to traffic data that makes their commute smoother, or if it allows targeted advertising that provide local tips and discounts. It can be done, but it's a matter of cultural acceptance - no easy feat!

Keep in mind as well that expensive public infrastructure is OKAY so long as there is enough private investment linked directly to its upkeep - by some estimates, municipalities need a 20:1 private to public investment ratio to keep infrastructure investments solvent. VMT and weight surcharges may indeed relieve the costs of highways and suburban roadways that aren't lined with lots of tax-contributing property owners whose property/business investment can help with upkeep. In urban environments, infrastructure costs should be handled by land development patterns that profit the local economy (regardless of density), coupled with congestion pricing for the vehicles that DO contribute to infrastructure life cycle costs.

VMT methods of raising money for roads and bridges are inefficient and only help the government build bigger databases about its citizens.  It also will start a whole new "industry" of cheating on the data (like air quality data, etc.).  The gas tax is relatively efficient because it's collected on the wholesale level.  Fuel retailers,  auto-makers, and the consumer don't have to be involved.  And, there's is no huge government agencies collecting data and sending out bills.

If there are going to vehicles that don't use gas or diesel, then work up a separate method for them alone, or have them pay a set amount per year.  Don't swipe the vast majority of vehicle into this government nightmare.  And, don't penalize those who have fuel-efficient vehicle with the same fee-level as gas-guzzlers.  Doesn't make any sense.

I agree that there must be SOME way to better capture the cost associated with use, wear, and tear on roads. In a recent Wired article, Michael Manville, an assistant professor of urban planning UCLA, made what I thought is a pretty powerful statement about why we need a solution to the inadequate gas tax:

"Roads are basically the only infrastructure we have that we experience daily shortages of... We don’t have rolling blackouts, the toilets don’t back up twice a day, and that’s not because the technology in those things is so much better. We just don’t give them away for free.”

As far as cost model efficiency is concerned, VMT is comparable to that of other infrastructure rate systems such as water ($/GPD), electricity ($/kWH), gas ($/therm), etc. A surcharge for vehicle weight makes sense too, as that's often a component of freight calculations and is directly correlated with the intensity of roadway damage. As the old saying goes, if it ain't broke...

From a behavioral economics standpoint, the best way to strike a balance between maximum participation and freedom of choice is an opt-out or 'presumed consent' system; a 'mandated choice' system could be used as well. Drivers would automatically be chosen ('presumed consent') or be required to choose registration for ('mandated choice') tracking VMT when they license/register their vehicle or when they acquire vehicle insurance. Both systems are statistically proven to increase participation. For users who opt-out in either system, registration fees or higher insurance premiums could be used to make up the difference, using an average VMT calculated through similar user and vehicle demographics.

I see where privacy is a concern, but most folks are already regularly tracked (whether they know it or not!) by the MAC or Bluetooth addresses of the vehicles/devices. Services like Google and Waze anonymize and aggregate data, 'dumping' sensitive information. People don't seem to mind if their personal location is contributing to traffic data that makes their commute smoother, or if it allows targeted advertising that provide local tips and discounts. It can be done, but it's a matter of cultural acceptance - no easy feat!

Keep in mind as well that expensive public infrastructure is OKAY so long as there is enough private investment linked directly to its upkeep - by some estimates, municipalities need a 20:1 private to public investment ratio to keep infrastructure investments solvent. VMT and weight surcharges may indeed relieve the costs of highways and suburban roadways that aren't lined with lots of tax-contributing property owners whose property/business investment can help with upkeep. In urban environments, infrastructure costs should be handled by land development patterns that profit the local economy (regardless of density), coupled with congestion pricing for the vehicles that DO contribute to infrastructure life cycle costs.