Should Michigan Drivers Pay Fees Based on Miles Driven? Report Says Yes

Fuel consumption is declining as traditional vehicles become more efficient and electric vehicles more common, making road funding models based on fuel taxes obsolete.

by Paul Egan, McClatchy News Service / May 15, 2014

 Michigan could solve its road funding problems by being one of the first states in the nation to move to a system where motorists pay a fee based on the number of miles they drive, according to a University of Michigan report (PDF) to be released today.

The report, prepared for the Michigan Environmental Council by Sustainable Mobility & Accessibility Research & Transformation (SMART) at U-M, says fuel consumption is declining as traditional vehicles become more efficient and electric vehicles more common.

Together, those trends are making road funding models based on fuel taxes obsolete, the report says.

“Instead of continuing to raise fuel taxes to pay for transportation infrastructure, a mileage fee could more fairly allocate costs based on the number of miles driven, the time of day, the route taken, and the weight of the vehicle,” the report says.

Elizabeth Treutel, a master of urban planning candidate at U-M and one of the authors of the report, said moving to such a system is probably five to 10 years away, but the report is partly intended to start a conversation.

“Having Michigan in the forefront would kind of allow Michigan to take the lead and shape and control how this is done,” Treutel said.

Several states and public institutions are studying the potential for a mileage fee policy, including Texas, Minnesota, Florida, Wisconsin and Nevada. There’s also a legislative proposal in California.

Treutel said Oregon is the leader on mileage fees, having recently launched a program under which 5,000 volunteers can move to the mileage-based system and get their gas taxes and other former road-related charges refunded.

Overseas, distance-based user charges are already in place for trucks in Germany, Austria, Switzerland and the Czech Republic, the report said.

Phil Lombard of Ferndale, who is retired from the Michigan Air National Guard where he flew as a navigator and in other flight crew roles, said he likes the idea of pay as you go. But he has one major concern.

“Privacy,” Lombard told the Free Press. “I’m not willing to let go of just exactly everywhere I drive.”

David Buchanon, who lives in Taylor, said he too would be worried about the Big Brother aspect of the state keeping tabs on drivers.

“A lot of cars already have those black boxes in them that can tell you what drivers were doing before an accident, and they can check the GPS on your cell phone to find out where you were coming from. What are they going to put in your car now to determine how far you drive?”

“That kind of intrusion worries me,” he said.

Chris Kolb, president of the Michigan Environmental Council, said privacy concerns are “the No. 1 big hurdle,” but one that he thinks can be overcome.

There are also issues surrounding whether motorists would think the system is fair, what technology would be used, and how the fee would be administered and paid.

Treutel said such a system would allow motorists to adjust the size of car they drive, how far they drive, and possibly when and where they drive to save on costs.

Heavier vehicles would pay more, and one possible plan would charge more for driving heavily congested roads at peak times and offer a discounted per-mile rate during off-peak times.

Jeff Cranson, a spokesman for the Michigan Department of Transportation, said the agency isn’t advocating for such a system, but “we think it’s good to have a discussion about the possibilities as other states ... study the concept.”

Michigan is grappling with what experts say is a road and bridge funding shortfall of between $1.2 billion and $2 billion a year.

Lawmakers are now debating a plan to raise an extra $450 million a year to put toward roads, partly by equalizing the taxes on regular unleaded and diesel fuel and moving to a percentage tax at the wholesale level.

“The longer any state waits to reform its transportation funding system, the more expensive the fix will be,” the report says.

As a leader in transportation technology and innovation, Michigan has an opportunity to lead the nation in transforming the currently outdated transportation funding mechanisms to one that is more fair, sustainable and self-sufficient.

Mark Milanchak, 32, of Sterling Heights who works in downtown Detroit, said the idea “sounds interesting, but the devil is in the details.”

“They need to do something to fix the roads, that’s for sure. And I don’t object to paying a little extra — especially after this winter chewed the roads up — but I would want to know how much and how they are going to keep track of how much people are driving.”

©2014 the Detroit Free Press