How to Pay for Roads, Bridges, and Transit
As it has for more than a century, AAA continues to be an advocate for the motorists and travelers who pay a large share of the nation’s transportation bill. In 2015, Congress passed a long-term, bipartisan surface transportation bill, Fixing America’s Surface Transportation Act or FAST Act, which provides more than $281 billion in transportation and transit program funding over five years. While the legislation provides much needed infrastructure investment, it failed to increase the gas tax or identify a sustainable source of funding for highway and transit programs. As a result, the certainty provided by the FAST Act will be temporary and Congress and transportation stakeholders will again be forced to address another Highway Trust Fund revenue shortfall in 2020.
As the debate about the future of transportation and its funding continues in Washington, AAA is working to ensure that the voice of the motorist is heard in the discussion. Motorists will likely be asked to reach deeper into their wallets to pay for transportation going forward, so it is imperative that those who pay understand what is being proposed.
What is a Road Usage Charge?
Road Usage Charge systems assess a fee on every mile driven, rather than on every gallon of fuel purchased. Under RUC systems, vehicles typically are equipped with technology capable of determining how many miles are driven, and vehicle owners are assessed a fee based on those miles. Various levels of technology are currently being tested, from the simplest form of odometer readings to more complex location-based tracking units. Total charges are calculated and paid at the gas pump, by periodic billing or through some other method. In the tests conducted to date, the revenue collected from the RUC system is dedicated to the upkeep, enhancement and expansion of the road network in a given area as a replacement to the fuel taxes collected.
Which states have explored RUC systems?
California, Oregon and Washington are currently exploring alternative revenue mechanisms and are working to develop similar pay-by-the-mile road usage charge systems as a means to supplement or replace state fuel taxes.
Has the federal government explored alternative funding solutions?
Within the 2015 transportation reauthorization bill, Congress authorized the Surface Transportation Systems Funding Alternatives (STSFA) grant program for states to research and test user-based funding alternatives as a substitute for federal fuel tax revenue. Recipients of the grant will use program funds to test the design, acceptance and implementation of a user-based system, and address the program’s objectives outlined below:
- Implementation, interoperability, public acceptance and potential hurdles to adoption of the demonstrated program
- Privacy protection
- Use of independent and private third-party vendors to collect fees and administer the program
- Congestion mitigation impacts
- Equity concerns
- Ease of user compliance
- Reliability and security of the technology used
AAA supports raising the federal fuel tax to meet transportation funding needs, provided the funds are invested in transportation improvements that increase safety and decrease congestion.
The federal fuel tax is the best near-term transportation funding source. Continued evaluation of alternative funding solutions, including RUC programs and tolling, is necessary to establish if there is an appropriate successor to the fuel tax for the longer term.
AAA encourages efforts by federal and state policymakers to develop the necessary framework to fully explore the viability of RUC programs. Frameworks should provide motorist protections and assurances, such as:
- A feasibility study to fully identify the costs needed to start and operate an RUC program and its real return on investment
- Provisions to ensure that revenue generated is dedicated to transportation
- Program transparency
- Protection of privacy and personally identifiable information
- Measures to prevent fraud and evasion
- Choices in technology and for information collection and payment
- Appropriate and fair enforcement tools
- Tolling on new highways and new lanes added to existing highways, and on the reconstruction or replacement of bridges, tunnels and existing toll facilities.
- High-occupancy toll (HOT) lanes, which allow toll-paying vehicles not meeting the minimum occupancy standards to use HOV lanes.
Toll pilot programs – Participation is limited to a fixed number of state or local participants authorized for each program. Project sponsors are required to submit an application and also must execute a toll agreement with Federal Highway Administration to receive authorization.
The Interstate System Reconstruction and Rehabilitation Pilot Program allows up to three existing interstate facilities (highway, bridge, or tunnel) to be tolled in order to fund needed reconstruction on interstate corridors that could not otherwise be adequately maintained or improved without the collection of tolls. Missouri, North Carolina and Virginia currently hold the three slots.
The Value Pricing Pilot Program (VPPP) allows up to 15 participants and provides tolling authority to state, regional or local governments to implement congestion pricing applications and report on their effects. FHWA continues to oversee 12 state-led programs and two city-led programs under VPPP including California, Connecticut, Florida, Illinois, Maryland, Minnesota, New Jersey, New York City, North Carolina, Oregon, Texas, Virginia, Washington and the District of Columbia.
AAA supports raising the federal fuel tax to meet transportation funding needs in the near term, provided the funds are invested in transportation improvements that benefit motorists. However, since a federal fuel tax increase is not politically viable, AAA supports the continued evaluation of alternative funding solutions, including tolling.
Tolling has a role in the overall funding picture, but alone will not solve the short-term federal transportation funding crisis.
AAA believes that while a toll-free system is preferred, tolls can be used with appropriate and necessary consumer protections in certain circumstances for new and existing corridors.