Comprehensive pricing rates—like toll rates—can vary, depending on their purpose. Pricing systems can be simple mileage charges designed to pay for certain infrastructure costs or more sophisticated systems used to also manage the road system more efficiently. While the Oregon pilot project identified technical, administrative, and institutional challenges to implementation of a true statewide or national comprehensive pricing system, the experience there also showed conceptually that a comprehensive road pricing system could fully or partially replace motor fuel taxes as the primary means of raising surface transportation revenues at the state and/or federal level.
The amount of net revenues that could be raised through a comprehensive pricing system would be driven largely by the established fee levels and the costs of administering the
| EXHIBIT 6-1: ILLUSTRATIVE FEDERAL VMT FEE SCENARIOS | |||||||||
| (all figures in 2008 dollars) | Estimated Federal VMT Fees (¢/Mile)a | Required | |||||||
| Charge on All Miles | Charge FAH Miles Only | Equivalent Fuel | |||||||
| Needs Scenario | Trucks | Avg.c | Trucks | Avg.° | Gasoline | Diesel | (billions) | ||
| Maintain Current Levels Scenarios |
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| 2008 HTF Revenues | 0.90 | 5.00 | 1.20 | 1.00 | 5.90 | 1.40 | 18.30 | 24.30 | $36.4 |
| 2008 Federal Program Level | 1.30 | 7.30 | 1.80 | 1.50 | 8.60 | 2.10 | 27.00 | 39.20 | $ 53.6 |
| Base Case Needs Scenarios |
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| "Need to Maintain" | 1.90 | 10.60 | 2.60 | 2.20 | 12.50 | 3.00 | 39.00 | 59.90 | $77.6 |
| "Need to Improve" | 2.30 | 13.20 | 3.20 | 2.70 | 15.50 | 3.70 | 48.40 | 75.90 | $96.2 |
| a. Estimated LDV and truck VMT charges maintain the current ratio of LDV and truck-related contributions to the HTF (i.e., revenues from federal gasoline and special fuel taxes versus federal diesel taxes plus truck user fees). b. Equivalent motor fuel tax rates assume current truck-related user fees are maintained (indexed for inflation); motor fuel taxes are based on levels needed to maintain the current ratio of total LDV to truck-related contributions. Equivalent rates also assume and account for the extension of current motor fuel tax refunds and transfer levels. c. Average VMT charges are simply total required revenues divided by all LDV and truck miles on the applicable system. | |||||||||
system. Thus, like the current motor fuel tax, the amount of revenue that comprehensive road pricing could generate depends on the extent of fee coverage and the fee level; for instance, prices could be established as a replacement for fuel taxes, as in the Oregon experiment, or they could raise more (or less) if desired. Several states have evaluated the implications of replacing their motor fuel taxes with VMT fees and, depending on the individual state's tax rates and on how the cost allocation between cars and trucks would be handled, have typically estimated that a fee of 1-2¢ per mile (average for light-duty vehicles (LDVs) and trucks) would be required.33
For illustrative purposes, the Commission evaluated potential scenarios associated with a national VMT fee system. (See Exhibit 6.1.) First, the Commission looked at what charges for light-duty vehicles (which includes cars, vans, and pickup trucks) and trucks (maintaining current LDV/truck contribution shares) would be needed either to replace the Highway Trust Fund (HTF) revenues based on current motor fuel tax and truck user fee rates or to fund the entire current federal highway and transit program. (Current federal program obligations exceed current HTF receipts by about $17 billion annually.)
| If the fees were charged at a flat rate on all travel, regardless of where it occurred, the required VMT fees would need to be about 0.9¢ per mile for LDVs and 5$ per mile for heavy trucks (an average of 1.2¢ per mile). The fees required to pay for the entire current federal program would be about 1.3¢ per mile for LDVs and 7.3$ per mile for trucks (an average of 1.8¢ per mile). If the fees were only imposed on miles traveled on the current federal-aid highway (FAH) system, they would need to be about 18 percent higher. | |||||
| (The federal-aid highway system covers all highways that are eligible to receive federal funding—roughly one-quarter of all roads in the United States. (See Exhibit 6.2.) It includes all Interstates and other National Highway System routes, as well as more than 800,000 miles of other principal roads.) | EXHIBIT 6-2: SYSTEM MILES AND VMT | ||||
| Annual VMT (In millions) | |||||
| System | Mileage | Trucks | Total | ||
| All U.S. Roads | 4,033,007 | 2,791,053 | 242,700 | 3,033,753 | |
| Federal-aid highway system | 985,129 | 2,368,115 | 205,923 | 2,574,038 | |
| Imposition of a federal VMT charge on just federal-aid highway system miles (or some other subset) could create an opportunity for state and local governments to impose VMT charges on facilities not subject to the federal charge. | The Commission also developed rough estimates of the VMT charges that would be required to raise sufficient revenues to address the 2008-35 average annual federal investment needs associated with the baseline investment scenarios as estimated in Chapter 2. These scenarios reflect the "Need to Maintain" and the "Need to Improve" if the historical federal share of all highway and transit investment needs (45 percent) were to continue. Again, the evaluation included consideration of VMT charges on all miles driven and on miles driven just on the FAH system. For VMT charges on all miles driven, the VMT fee to meet the "Need to Maintain" federal investment level ($77.6 billion) would be 1.9¢ per mile for LDVs and 10.6¢ per mile for trucks (an average of 2.6¢ per mile). The charges required for the "Need to Improve" federal investment level ($96.2 billion) would be 2.3¢ per mile for LDVs and 13.2¢ per mile for trucks (an average of 3.2$ per mile). Again, if the fees were only imposed on miles traveled on the current FAH system, the charges would need to be about 18 percent higher. |
These scenarios do not account for the additional fees that would likely need to be charged to recover the cost of administering a national VMT fee system. These costs are currently unknown but are expected to exceed the current costs for administering motor fuel taxes (about 1 percent of total revenues). To provide some perspective, applying the Dutch government's goals of 5 percent administrative costs and integrating these costs into the national VMT fee, the charge needs to increase in the range of 0.1$ per mile for LDVs and 0.5$ per mile for trucks.
It is also worth noting that the imposition of a federal VMT charge on just FAH system miles (or some other subset) could create an opportunity for state and local governments to impose VMT charges on facilities not subject to the federal charge. For example, if states were to impose VMT charges on all non-FAH route miles at the same rate as the federal government charges on the FAH system under the "Need to Maintain" scenario, resulting state revenues would total almost $14 billion annually.