Alternatives to the Motor Fuel Tax

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Alternatives to the Motor Fuel Tax

• Anthony M. Rufolo
• Robert L. Bertini
• Portland State University
• February 14, 2003

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NCHRP 377 Alternatives to Motor Fuel Taxes (1995)

• Motor Fuel Taxes Important for at Least Next
  Three Decades
• VMT Taxes and Fees Desirable, But Depend on
  Technological and Political Developments
• Promising New Sources Should Be Phased In
• Transportation Agencies Should Promote Research
  on New Technologies That Address Revenue
  Collection Issues

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Road User Fee Task Force (RUFTF)

• Created By Oregon Legislature
• Develop Demonstration Project
• Major Focus is Revenue
• Federal Value-Pricing Support Increased
  Consideration of Congestion

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Literature Review (Since 1995)

• Near Term Impact of Alternative Fueled Vehicles
  Likely to be Small
• Greater Potential Revenue Impact Due to High Fuel
  Efficiency
• Improved Technology Makes Tolls More Attractive
  But Resistance to Use on Previously Free Roads
• FHWA Value-Pricing Program Demonstrates
  Feasibility of Selective Pricing
• No Current Systems Replace Or Reduce Gas Taxes
  All Supplement It

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Value Pricing Issues

• Extent of Price and Service Variation
• Would Gas Taxes Be Reduced
• Toll Systems More Expensive to Operate But Costs
  Declining Over Time
• Simple Projects Are More Likely to be Implemented
  and Successful Than Elaborate Projects
• Equity Considerations

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Economic Issues

• Registration Fees Could Target Efficient
  Vehicles But Road Use Pricing Appears to Be More
  Viable
• Current Systems Are Tolls But Technology Making
  More Sophisticated Pricing Feasible
• Advanced Systems Raise Questions of Cost and
  Privacy
• Revenue Estimates May Be Problematic for Partial
  Replacement of Gas Tax

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Economic Issues (cont)

• Equity issues between vehicle classes, income
  groups, and geographic regions
• Only congestion pricing likely to improve
  economic efficiency
• Replacement likely to create coordination issues
  with Washington and transition Issues

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Some Issues to Consider

• Whether an alternative pricing system should
  include continuing or ending the fuel tax
• Whether an alternative pricing system should tax
  out-of-state mileage
• Whether to charge for social costs
• The time horizon for implementation of an
  alternative pricing system
• Whether to charge more during peak hours in
  selected locations
• Tolerable level of administrative costs
• Type of technology and the implications for
  privacy