NewsTrucking Regulation

Watchdog pushing feds to move on truck user fee pilots

$191 billion needed over 10 years to make up for Highway Trust Fund shortfall

Shoring up the struggling Highway Trust Fund (HTF) using a mileage-based user fee regime for cars and trucks may take longer than anticipated based on a new federal oversight report.

That’s because the Federal Highway Administration has so far not determined how to scale up various state and regional pilot projects around the country, according to the report, issued this week by the Government Accountability Office.

The GAO stated that since 2016, federally funded mileage-fee pilot projects were small in scope, with varying designs and approaches. Because of their small scale and with limited driver participation, evaluating their scalability in a broader setting has been vital, GAO stated.

“However, FHWA evaluations did not include scalability criteria … to identify how, if at all, an individual state’s pilot approaches could inform national policy,” according to GAO, noting that such criteria could include examining whether the use of technologies to track and report mileage deployed in various pilot projects would be feasible in a national system.

“Without scalability criteria, FHWA will not be able to assess the potential of mileage fee systems beyond the pilot states nor provide information or recommendations, if any, for congressional consideration of these approaches to address the current insolvency of the [HTF] — an issue GAO has had on its high-risk list for over a decade.”

With the trust fund requiring an estimated $191 billion over the next 10 years to cover projected revenue shortfalls, the GAO recommends that FHWA develop and apply criteria to assess the scalability of the federally funded pilot projects.

“I think that’s true,” said Barbara Rohde, executive director of the Mileage Based User Fee Alliance, when asked about FHWA’s inability to assess small-project scalability. “We really need more information to go forward.”

The Infrastructure Investment and Jobs Act (IIJA), signed into law by President Joe Biden in November, required the U.S. Department of Transportation to design a nationwide pilot mileage-based user fee system for cars and trucks, and recruit volunteers to participate.

Rohde, who provided an update on the status of the national pilot on Tuesday at the Transportation Research Board’s annual meeting in Washington, said an advisory panel must first be created to advise DOT on setting up the national pilot.

“Right now states have a lot of independence in how they’re doing their pilots, but as a national program is developed we want to be sure it’s interoperable between the states,” Rohde said during the panel.

The IIJA provides for an increased federal share of the cost for a local pilot project, ranging from 70%-80%. It also requires DOT to submit a report to Congress by November 2024 recommending a potential nationwide user-based revenue stream for the HTF.

According to the GAO report, state DOTs cited public acceptance of mileage fee systems as one of the major challenges faced by their pilot projects. “Specifically, many of the states reported that public acceptance of mileage fee systems remains limited by concerns about protecting privacy and achieving equity.”

“When I go out into the world, the biggest concern is privacy,” Rhode agreed. “But after years of meeting with members of Congress, the main issues seem to be administrative costs and who collects the money.”

Rhode also noted that the cost to administer a mileage-based user fee is generally considered greater than collecting a gas tax — the current way the HTF is funded. However, “Once we implement this nationwide, I think costs will drop,” she said.

“Technology is improving so fast that five years from now I think we’ll start to see costs go down, and in 20 years it might be as cheap as collecting the gas tax, which is what we have to be working toward.”

GAO also pointed out that truck mileage fees could pose fewer concerns over both privacy and costs than passenger vehicle fees. “For example, trucking companies may already monitor commercial drivers as a condition of employment and many commercial trucks have existing GPS technology to enable mileage tracking.”

Click for more FreightWaves articles by John Gallagher.

3 Comments

  1. When a tractor trailer purchases fuel, a fuel tax is paid. Every quarter the trucking company has to calculate the mileage all tractors drove per state & calculate the MILEAGE TAX to pay each state. We pay tax to purchase the fuel and a tax to use the fuel. Now they want to add an additional tax to these taxes? Why not actually use the funds allocated for road repair and maintenance, instead of saving it in a slush fund to use on petty projects that have nothing to do with roads. This is getting out of hand.

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John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.