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Exploring Funding Options

To ensure the voices of citizens along the I-95 corridor are included in the national discussion of how to establish a sustainable and equitable transportation funding approach, the I-95 Coalition applied for and received funding through the USDOT “Surface Transportation System Funding Alternatives” program for a multi-year study. The purpose of the Coalition’s study is to explore the feasibility of replacing the fuel tax with a mileage-based user fee (MBUF) in a multi-state environment through a focused pilot in Delaware and with regional stakeholders.


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Why explore a Mileage-Based User Fee?

Americans pay for transportation infrastructure primarily with a fuel tax. As fuel efficiency increases and more electric vehicles are on the road, the amount motorists pay to use our transportation system becomes more linked to the type of car they drive versus the number of miles they drive. Instead of older, less fuel-efficient vehicles paying more for using the transportation network, a MBUF charges for the amount you use.

Illustrated below are three vehicles traveling the same distance on the same road. Because electric-vehicle drivers don’t buy fuel, they don’t pay fuel tax, so they aren’t paying as much for road maintenance and construction. As more fuel-efficient vehicles take to the roads, drivers purchase less fuel and pay less fuel tax than older vehicles. 

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A Multi-State, East Coast Voice is Needed

While other states are also studying MBUF, the research has primarily been conducted in western states. Our study will bring the East Coast perspective to the national discussion and will be the first to dive deeply into the unique challenges of managing out-of-state mileage and toll interoperability posed by paying for miles driven rather than gallons purchased. Our study will also explore the financial implications of MBUF, potential synergies with current commercial vehicle reporting requirements, concerns about privacy and equity and the value-added amenities available to drivers through the MBUF reporting technologies. Because our Coalition crosses state lines and includes state, regional, and municipal organizations, we are well-positioned to examine the critical issues associated with a nationwide shift in transportation infrastructure funding.


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Leading the Way Forward

The I-95 Corridor Coalition is bringing the exploration of a mileage-based usage fee to the East Coast through the USDOT “Surface Transportation System Funding Alternatives” (STSFA) program. The Coalition, with the Delaware Department of Transportation as the lead, took advantage of this opportunity by applying for and winning funding for two phases of a multi-year study ($1.16 million Phase 1 and $1.95 million Phase 2). The study is being led by a multi-state and multi-disciplinary advisory committee, and will explore how a per-mile fee could be assessed for in-state and out-of-state drivers and for tolled roads.  

The centerpiece of the study is a focused pilot in Delaware that included regional stakeholders. Participants had a choice of technology to record their miles driven during the three-month pilot. In addition, each technology option offered a variety of services and amenities for participants, such as visual trip logs, driving scores, and vehicle health monitors. Pilot participants did not make any actual payments as part of this study. Rather, “faux” invoices were sent out monthly showing what they would have been charged under a mileage-based system.

The main purpose of the focused pilot was to provide a better understanding of how a mileage-based user fee might work in real life.

Pilots in other states have resulted in an increase in positive perception of MBUF and the notion of “fairness.” In Oregon, MBUF pilot participants were twice as likely to support MBUF (69%) as compared to statewide public perception.