July 28, 2021
With our nation’s infrastructure falling apart as it ages, policymakers are looking for a long-lasting solution that will fund our crumbling roads. Right now, the Highway Trust Fund is financed mainly by the gas tax. Due to the prevalence of fuel-efficient and electric vehicles, combined with inflation, the gas tax is no longer feasible to fund the much-needed maintenance of our roads, highways, bridges, and tunnels. This is why policymakers are turning towards the vehicle miles traveled tax or road usage charging. The vehicle miles traveled tax is exactly what it sounds like: drivers would be charged based on how many miles they travel instead of how much gas they use. How is this system better and how is it being implemented today? We will go over how the vehicle miles traveled tax works along with some vehicle miles traveled statistics.
Fuel-efficient and electric vehicles are becoming more popular every year. They use the roads just like everyone else, but they do not pay their fair share towards their upkeep. All drivers should pay for the wear and tear they inflict on the road. This is the thought process behind road usage charging or the vehicle miles traveled tax. For drivers already paying the gas tax, fees would remain about the same. However, more people will be paying into the Highway Trust Fund, resulting in more funding and safer roads. Each state has an average of 49% unsafe roads. If implemented nationwide, the vehicle miles traveled tax would bring in $340 billion to repair these roads and make the streets safer for everyone.
Oregon was the first to implement a vehicle miles traveled tax with OReGO. OReGO is an entirely voluntary road usage charge program. Participants can take advantage of incentives such as minimum registration fees and Azuga’s free remote emissions testing service. Citizens can sign up online with a new car at the dealership or at any other time of car ownership. Drivers who opt in must meet the following vehicle requirements:
Once enrolled, reporting driver miles is easy. The driver can choose to use the GPS plug-and-play device. They simply plug the hardware into their OBD port, which comes standard on most vehicles built after 1996. Then, they set up their digital wallet, and as they drive, money is automatically deducted based on how many miles they travel. No human resources are needed to track the miles or collect the payments. If the driver chooses not to use the GPS option, they can opt for a non-GPS device from Azuga or select the manual entry option coming soon. In short, a road usage charge system is easy to implement at user level and will be cheaper long term than other complicated solutions.
Utah’s vehicle miles traveled tax works very similarly to Oregon’s. The programs is open to only electric and hybrid vehicles. They simply install hardware into their vehicle to track their miles and set up a prepaid wallet. Their program is enrolling one new member per day, and as of June 2021, they had 3,700 members.
In 2016, California tested a vehicle miles traveled tax program on 5,000 vehicles and found that 90% of people would be willing to participate in a permanent program. 73% agreed that a road usage charge is fairer than a gas tax.
Colorado’s road usage pilot program found that 93% of people were satisfied with the pilot program, and 91% would participate in a future program. 81% agreed that it was fairer than a gas tax.
Hawaii wants to move towards 100% clean energy by 2045. They tested a road usage charge to encourage the use of electric vehicles while still maintaining their roads and infrastructure.
Washington completed a report in January of 2020 detailing how they can transition away from the gas tax and towards the road usage tax.
Delaware ran a road usage program to track what roads received the heaviest use and boost support for a road usage program.
Pennsylvania plans to propose a road usage charge this month similar to Oregon’s.
Minnesota has conducted opinion surveys to see if their citizens would support a program similar to Oregon’s.
The vehicle miles traveled tax has been all the buzz in many states for the last several years. These states must fund their infrastructure in a way that is fair to all citizens while keeping them safe. Oregon and Utah are leading the way with their programs. Azuga’s technology made Oregon’s program possible, and we are working with other states to bring their road usage charging programs to life as well. Find out what we are up to by following our blog for more updates.
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