August 25, 2021
The road usage charge is looking to be the future of funding our nation’s infrastructure. Funding for infrastructure initiatives comes through the Highway Trust Fund, which gets money from citizens paying the gas tax. However, the gas tax simply isn’t cutting it anymore due to inflation and the development of fuel-efficient and electric vehicles. Meanwhile, America’s roads, bridges, and highways are crumbling, and we need a solution before more people get hurt. The road usage charge is a solution that will benefit everyone. It simply charges drivers for how many miles they drive instead of how many gallons of gas they purchase. How does the road usage charge benefit everyone? Who is already on board? And when might this become a nationwide solution?
More Money for Safer Roads: If states implemented road usage charging nationwide, it would bring $340 million in funding to the Highway Trust Fund. This would mean plenty of funding to fix America’s surplus of unsafe roads. Right now, about 49% of America’s roads are in poor condition. Obtaining funding to fix these roads would keep drivers safe and prevent hundreds of accidents each year.
Fair for Everyone: Under the gas tax, drivers of electric and fuel-efficient vehicles continue to use the roads but do not pay as much as everyone else towards their upkeep. Under a mileage fee program, all drivers pay their fair share towards repairing and maintaining the roads based on the wear and tear they inflict upon them. This method is more reasonable for everyone and means more people are paying towards the Highway Trust Fund.
Costs are Similar: Depending on the fee amounts state legislators implement, drivers already paying the gas tax may not see much difference, if any, in what they pay each year. In Kauai, Hawaii’s study of road usage fees, they found that their drivers pay $75 annually, whether under gas taxes or a road usage charge. There is more money to go around because more people are paying into the program. Drivers of electric vehicles and fuel-efficient vehicles are incentivized to join road usage programs through other means, like lower registration fees.
Oregon was the first state to implement a road usage charging program, which they call OReGO. On January 1st, 2020, registration fees for electric and fuel-efficient vehicles rose, and these drivers could opt out by enrolling in OReGO, which is entirely voluntary. OReGO uses Azuga Insight to track driver miles and collect revenue automatically. This automatic process requires minimal staff, making it very easy to implement. The Azuga Insight device simply plugs into the driver’s OBD port and begins tracking miles! Then, the driver sets up their digital wallet, which links to the Azuga Insight device and automatically deducts money based on how many miles they drive.
Utah has a road usage charging program very similar to Oregon’s. Drivers can either opt in to the program or pay an increased registration fee at the beginning of 2020.
Connecticut has some of the worst roads in the country. It makes sense that they would institute road usage charging. Starting in 2023, they will implement the truck vehicle miles traveled tax, requiring all vehicles weighing more than 26,000 pounds to pay a road usage charge for every mile driven in Connecticut.
Many other states have run road usage pilots to test the feasibility and popularity. Among other states, Washington, California, Colorado, Delaware, Pennsylvania, Minnesota, and Hawaii have run pilots and found them to be successful and popular and are considering implementing road usage charging in the future. Most of these states are looking at programs similar to Oregon’s and Utah’s.
Infrastructure is at the forefront of both sides of the political spectrum. After all, keeping citizens safe is a goal that everyone can get behind. Transportation Secretary Pete Buttigieg has expressed his support for a vehicle mileage fee. He says that a mileage tax “shows a lot of promise if we believe in that so-called user-pays principle: The idea that part of how we pay for roads is you pay based on how much you drive.” Therefore, the Biden Administration already has road user fees on the table as an option to be implemented soon. Many states support it already, and even without a national requirement, it is likely that more states will continue to roll out their own road user fees in the coming years as they complete their pilots and studies. It is very likely to be the next major shift in government funding.
Road user charging would not be possible without the proper technology to track miles and collect revenue. That’s why Azuga created Azuga Insight and continues to create solutions that help keep drivers safe. Find out more about what Azuga Insight has to offer on our website.