RAND ReseARch AReAs ChiLDREN AND FAMiLiES EDUCAtiON AND thE ARtS ENERgy AND ENviRONMENt hEALth AND hEALth CARE iNFRAStRUCtURE AND tRANSPORtAtiON iNtERNAtiONAL AFFAiRS LAW AND BUSiNESS NAtiONAL SECURity POPULAtiON AND AgiNg PUBLiC SAFEty SCiENCE AND tEChNOLOgy tERRORiSM AND hOMELAND SECURity

F or nearly a century, federal and state gasoline and diesel taxes have provided the main source of revenue for funding the nation’s road network. But such taxes—typically levied on a cents-per-gallon basis—must be raised periodically to keep pace with inflation and improved fuel economy. With the rise in antitax sentiment over the past several decades, elected officials have grown increasingly reluctant to take on this unpopular task. Thus, fuel tax receipts, measured in real dollars per mile of travel, have fallen precipitously, leaving insufficient revenue to maintain, let alone expand, the road network. This decline will likely accelerate in future decades as conventional vehicles become more efficient and as alternative fuel options (e.g., electric cars) are introduced and gain market share. Against this backdrop, many believe the nation should replace fuel taxes with a system of user fees based on vehicle miles of travel, or VMT. (VMT fees are also known as mileagebased user fees, or MBUF.) Because VMT is expected to grow faster than fuel consumption in the coming decades, VMT fees should provide a more stable source of revenue. Since 1980, with gradual gains in average vehicle fuel economy, VMT has doubled, while fuel consumption itself has increased by just half. Long-range projections for fuel consumption and VMT from the Energy Information Administration (EIA) suggest that this trend will continue. According to EIA projections, federal fuel tax revenue (assuming current per-gallon rates) should increase by about 10 percent between 2015 and 2030, growing from $36 billion to $39 billion (2009 dollars). If, instead, federal fuel taxes were replaced with VMT fees in 2015 at an initially revenue-neutral rate, receipts should increase by 33 percent over the same period, growing from $36 billion to $47 billion. Beyond providing a more stable revenue stream, VMT fees could support many other goals. Rates could be structured to help reduce congestion and harmful emissions, metering devices could provide value-added services (e.g., safety alerts, real-time traffic information and routing assistance, and the ability to save money with pay-as-you-drive insurance), and the system could generate rich travel data for improved transportation planning. In a two-phase study for the National Cooperative Highway Research Program for Key findings: