Tuesday, March 6, 2012

Mileage-Based User Fee

In December of 2011, the Mileage-Based User Fee Policy Task Force (MBUF) released a report.  The goal of the Mileage-Based User Fee Task Force was "To engage stakeholders and a Policy Task Force, with the intent of identifying and evaluating issues for potential implementation of MBUF in Minnesota."  The full report can be found on the link below on the left side of the page:


Since 1980 the trend in fuel consumption—and associated fuel tax collections—has lagged the growth in vehicle miles traveled. The gap between vehicle miles traveled and fuel used is projected to grow substantially up to 2030.  The mileage-based user fee has garnered attention from state policymakers.

Overall MBUF Concept Public Opinion

Minnesotans tend to like the following things about MBUF:
• All drivers pay their fair share for roadway use
• It is flexible enough to work with all future vehicle fuels

Minnesotans tend to be concerned about the following aspects of MBUF:
• Cost and complexity
• Reliability of the technology
• Privacy

The task force made several recommendations.
  • Any future transportation funding method(s) must ensure that all drivers pay their fair share for building and maintaining the roadway transportation system they use.
  • Minnesota’s roadway transportation funding methods must cover all vehicles using that system, regardless of the type of fuel(s) used.
  • State policymakers engage in a thoughtful discussion regarding whether to use an MBUF system to address future funding gaps between motor fuel tax revenues collected and the cost to preserve, maintain and expand the roadway transportation system.
  • Conduct MBUF trials, possibly in partnership with contiguous states.
The Task Force went on to have two lengthier recommendations regarding working with local road authorities and conducting a technical analysis to take into account things like sufficient funding, constitutionally dedicated for roadway transportation, and privacy issues.  The final recommendation dealt with ensuring that MnDOT provided a technical analysis that provides a clear answer on how the system would be set up.

This user fee is something that has garnered a lot of attention and it appears the task force favors an MBUF for Minnesota.  Unfortunately, it appears that this report didn't have any type of specific revenue estimate for Minnesota.  It did give Washington as an example, stating that the net benefit over a 30-year period was estimated at $28 billion dollars in 2011 dollars.  That said, it should be noted that there was a minority report stating, "Once again, the task force report has failed to go beyond a purely theoretical MBUF concept and wrestle with the details of such a tax as it might be administered, collected, and enforced."

I would be interested to see a revenue analysis of a MBUF in Minnesota.  Additionally, it will be intriguing to see the results of the technology test of roughly 500 participants from Hennepin and Wright counties that will be released in December of 2012.

1 comment:

  1. It seems like a fee based on both miles traveled the weight of the automobile might be the way to go since road damage is largely a result of these two factors. Such a system would likely capture more revenue from vehicles that rely less heavily on gas (e.g. biodiesel, electric, and hybrid vehicles)than does the gas tax while still acknowledging that lighter and more fuel-efficient vehicles put less wear on roads.