U.S. per-mile pilot exploring gas tax replacement finally advances

A long-delayed U.S. pilot program that would charge drivers by the distance they travel will finally advance with the establishment of an advisory board to oversee the program.

But that’s likely not soon enough to help inform Congress about the feasibility of the charges when lawmakers craft the next surface transportation reauthorization bill in 2026 — an original goal of funding the pilot program in the Infrastructure Investment and Jobs Act.

The IIJA allocated $50 million for the National Motor Vehicle Per-Mile User Fee Pilot, which was to include an advisory board that was to be created no later than 90 days after the law’s November 2021 enactment. The pilot program includes both personal vehicles and commercial trucks, and volunteers will have their mileage fees deposited in the Highway Trust Fund.

The move comes as Congress seeks user-fee based alternatives to replace the federal gas tax, which has not been raised since 1993 and faces diminishing purchasing power every year. Charging drivers for their traveling distance is among the most popular user-fee alternatives so far, although obstacles range from public skepticism to thorny collection problems.

A number of states have started to implement their own programs, and the U.S. pilot aims to determine the feasibility of a national charges to replace the federal fuel tax.

With federal fuel taxes as its main revenue source, the Highway Trust Fund faces insolvency as soon as 2028 without another massive general fund infusion of the kind that has kept it afloat for decades. Since 2008, the fund has relied on $275 billion in transfers, mostly from the general fund, said Rep. Rick Crawford, R-Ark., during a House Highways and Transit Subcommittee hearing last Thursday. The IIJA sent another $118 billion into the fund, postponing insolvency until 2028, Crawford noted.

“We need to work together to reform the Highway Trust Fund to ensure that the users who benefit from the system pay into the system,” Crawford said.

On Oct. 3, nearly 18 months late, the Federal Highway Administration released a solicitation notice for interested candidates with a Nov. 17 deadline to submit applications to sit on the Federal System Funding Alternative Advisory Board. The board will design and oversee the pilot program.

Based on the IIJA, the advisory board was to be established by Feb. 14, 2022, and provide implementation recommendations to the U.S. DOT one year later, said Marc Scribner, senior transportation policy advisor at Reason.

“It’s very good they’re finally moving on this, however Congress was fairly clear that one of the primary purposes of this pilot program was to inform them on next steps for the subsequent surface transportation reauthorization bill due by October 2026,” Scribner said. “They were hoping for a more thorough evaluation of some of the key issues that they’re hoping the pilot will investigate,” he said, adding that House Transportation & Infrastructure Chair Sam Graves, R-Mo., and Senate Environment and Public Works Committee Chair Tom Carper, D-Del., wrote a July 24 letter to Transportation Secretary Pete Buttigieg complaining about the delay.

“This delay means they’re not going to get the information by then,” Scribner said.

A mileage-based charge may not solve the Highway Trust Fund’s chronic deficit, but if implemented, it would help maintain the fund’s basic user-pay, user-benefit structure, Scribner said.

“The alternative is no user-based revenue and shifting everything to annual appropriations, so then your income taxes are paying for the highway system,” he said. A new user-based fee like a mileage fee “certainly doesn’t solve the revenue problems but but it will keep allowing us to have the debate over the appropriate level of revenue.”