Tuesday 12 October 2021

US Federal Government looks to fund more state pilots and a Federal RUC pilot : Part One - More state and local RUC pilots to be funded

The Infrastructure Investment and Jobs Act, currently before the US Federal Congress, would “establish a pilot program to demonstrate a national motor vehicle per-mile user fee to restore and maintain the long-term solvency of the Highway Trust Fund and achieve and maintain a state of good repair in the surface transportation system”.

It is also continuing the successful partnership between state and Federal Governments to fund investigations into RUC.

So this is big news in the world of road pricing.  It effectively means that there could be a National US RUC pilot, but it also supports the continuation of the past few years of funding state based RUC pilots.

So what does this mean?

That first is a continuation of the FAST Act programme by which the Federal Government funded States investigating “user-based alternative revenue mechanisms” which includes RUC.  That programme has been funding pilots in the US since 2015 and most recently announced funding in March for California, Delaware, the Eastern Corridor Coalition (seven states), Hawaii, Kansas/Minnesota, Ohio, Oregon (for RUC West), Texas and Utah to progress a range of projects.

The Act would provide additional funding so States, local government or metropolitan planning agencies can pilot RUC, with some specific objectives:

  • To test the design, acceptance, equity, and implementation of user-based alternative revenue mechanisms, including among--
                            (i) differing income groups; and
                            (ii) rural and urban drivers, as applicable.
  • To provide recommendations regarding adoption and implementation of user-based alternative revenue mechanisms.
  • To quantify and minimize the administrative costs of any potential user-based alternative revenue mechanisms.
  • To test a variety of solutions, including the use of independent and private third-party vendors, for the collection of data and fees from user-based alternative revenue mechanisms, including the reliability and security of those solutions and vendors.
  • To test solutions to ensure the privacy and security of data collected for the purpose of implementing a user-based alternative revenue mechanism.
  • To conduct public education and outreach to increase public awareness regarding the need for user- based alternative revenue mechanisms for surface transportation programs.
  • To evaluate the ease of compliance and enforcement of a variety of implementation approaches for different users of the surface transportation system.
  • To ensure, to the greatest extent practicable, the use of innovation.
  • To consider, to the greatest extent practicable, the potential for revenue collection along a network of alternative fueling stations.
  • To evaluate the impacts of the imposition of a user-based alternative revenue mechanism on—
(i) transportation revenues
(ii) personal mobility, driving patterns, congestion, and transportation costs; and
(iii) freight movement and costs.
  • To evaluate options for the integration of a user-based alternative revenue mechanism with-
(i) nationwide transportation revenue collections and regulations;
(ii) toll revenue collection platforms;
(iii) transportation network company fees; and
(iv) any other relevant transportation revenue mechanisms.

This is quite a list of objectives, indicating exactly the issues around RUC that exercise politicians in the US.  Concerns about whether RUC might be less fair on people on low incomes (although this needs to be compared to the gas tax and paying for roads from general taxes such as sales taxes), and concern that paying by distance hurts rural communities ignores past work that indicates that this is largely not the case (and sometimes the contrary). 

Other issues around administrative costs, enforceability, privacy, use of the private sector to collect revenue. There is the odd case of a system based on paying through “alternative fueling stations” which appears to be code for taxing electricity charging stations, which is not a good idea at all.

One boost is the proposal that funding be 70% of the costs of a proposal put forward by an entity that has previously received funding, and 80% for a new one. This is clearly designed to incentivise states and other entities that have not pursued such studies in the past.  For each year from 2022-2026 US$15 million will be available to be spent on such studies or pilots. 

Expect more states to study and pilot RUC, but also expect more implementations.  

So far in the US, only Oregon and Utah have revenue-collecting operational RUC systems for light vehicles (Oregon, New Mexico, Kentucky and New York all have weight-mileage taxes for heavy vehicles), although there are mandates for RUC in Virginia and Connecticut as well.

The US Federal Highways Administration has a useful list of ALL of the grants given to states under the FAST Act so far. It has been for the following states:

California (US$6.68 million) 

Colorado (US$0.5 million)

Delaware/Eastern Transportation Coalition (Seven states plus DC) (US$13.513 million)

Hawaii (US$4.248 million)

Kansas (US$3.25 million with Minnesota)

Minnesota (excluding Kansas US$1.3 million)

Missouri (US$4.8 million)

New Hampshire (US$0.25 million)

Ohio (US$2 million)

Oregon (US$9.412 million)

Oregon for RUC West Consortium (US$5.42 million)

Texas (US$5 million)

Utah (US$3.245 million)

Washington (US$13.972 million)

Wyoming (US$0.25 million)

In my next article, I'll write about the prospective US National pilot

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