Road Usage Fee

Road Usage Fee to Replace Gas Tax

Update 3/28/21: Presentation on Road Usage Fee (starts at 14:26) from the Washington State Department of Transportation (WSDOT) at a PSRC Transportation Policy Board Meeting.

The State has traditionally funded its transportation system using gas taxes, which under the state constitution can only be used on state highway projects (the state highway includes the Washington State Ferries). Revenue from gas taxes per mile driven has been going down, because of advances in fuel efficiency, but cost of maintaining the roads has been going up due to inflation. The State was supplementing this revenue with income from vehicle licensing fees (car tabs). After passage of I-976, many state transportation projects were put on hold, but during the 2021 legislative session it is anticipated that the state will have to come up with some alternative revenue model for funding WSDOT; or, since I-976 was ruled unconstitutional, the state could return to using car tab fees.

The State also has jurisdiction over how regional and local authorities can raise funds for transportation, and because these were heavily reliant on car tab revenue, they are also in need now. Another task for the legislature this year is to allow more pathways for funding Transportation Benefit Districts.

With the need to build new infrastructure for electrification of transportation, as well as addressing a road maintenance backlog and possibly helping local jurisdictions and schools make investments in electrification, the state now has even more needs than it had before.

The state gas tax must remain in place for at least 10 years, because bonds have been issued which are backed by the gas tax. In fact, much of the revenue collected from the gas tax is already pledged to repayment of previous projects. But the state has started to consider alternatives. A Vehicle Miles Travelled (VMT) fee is one such alternative. VMT is a road use fee that applies based on the number of miles driven. Depending on how it is implemented, it could be applied in a flat way, to all miles driven, or just for miles within a certain area. It could be applied more or less depending on the value of the car, or on the weight of the car. Washington State is considering a VMT tax in place of the gas tax, and such a tax could also fund local Transportation Benefit Districts. Washington has just completed a pilot project, using a grant from the US DOT, to make recommendations for Washington. The report states that "road usage charging has been found to be one of the most promising revenue options if Washington wishes to continue funding roadways on a user-pays basis", and it concludes:

From: Washington State Dept. of Transportation, Road Usage Charge Assessment, Section 1.2

The Washington State Transportation Commission (WSTC) recommends that the Legislature enact a per-mile road usage charge (RUC) now on a small number of vehicles, including alternative fuel vehicles and state-owned vehicles, as the first step in a 10- to 25-year transition away from gas taxes to fund the state highway system. With the gas tax already declining, adoption of cleaner and alternative fuel vehicles accelerating, and RUC systems and technologies ready for implementation, the State must act now to avoid a predictable transportation funding crisis later. Starting small and transitioning gradually affords the Legislature and state agencies time to make necessary system refinements and policy adjustments to a RUC system in a deliberate, controlled manner.

From: Washington State Dept. of Transportation, Road Usage Charge Assessment, p.8

The state studied different forms of it, including:

  • Manual RUC, where the fee is calculated based on an annual odometer reading. This could be by self-reporting, by inspection, or could be as simple as taking a photo of the odometer and sending it in.

  • Mileage Permit, where you purchase ahead of time a permit to drive a set number of miles

  • Automated RUC, where a device does the calculation and reporting back. If the device is equipped with GPS, it could allow local jurisdictions to levy extra charges for driving for their area, as well as exempt your car for out of state miles or off-roading. It is possible that the device used could be a smartphone.

Clearly, any system that tracks your location will cause concern around privacy. The state would like to continue studying VMT, as part of a new project dubbed Forward Thrust, and is applying for federal funds for that, to look into questions around enforcement, inter-state travel, and cost.

There are 20 states currently studying some form of VMT as a replacement for the gas tax.

Recently, WSDOT completed a pilot program with a number of drivers in different parts of the state, and presented the results at a meeting of the PSRC Transportation Board. Each driver was given a choice of methods:

Each method has different advantages and disadvantages, as explained in the slide. However, the study found that on average, most rural & lower income drivers would reduce their payments when compared with a gas tax. This is because cars with better mileage are more expensive, and more likely to be owned by wealthier households, leaving other drivers footing a disproportionately higher share of the bill. However, the amount paid is a small proportion of the total cost of car ownership, and it is not anticipated that a VMT would discourage electric vehicle ownership. The state's working plan is to leave the gas tax in place, which allows payment of bonds already issued, as well as allowing drivers to pay their fees incrementally when they buy gas, and then later apply for money back.