Australia: Industry briefing of National Heavy Vehicle Charging Pilot Large Scale On-Road Trial Procurement

The Australian (Federal) Government's Department of Infrastructure, Transport, Regional Development and Communications has published a Notification of Industry Briefing, for its National Heavy Vehicle Charging Pilot.  The industry briefing will be held THIS FRIDAY 1 May from 0815-1030 Australian Eastern Standard Time (2215-0030 UTC/GMT 30 April-1 May) and then 1715-1930 the same day (0715-0930 UTC/GMT 1 May).  The first session is timed for Australian, New Zealand and North/South American interest, and the second one for Asian, European/African interest.

The text below is a verbatim extract directly from the notice:

The purpose of this industry brief is to provide information to, and obtain information from, potential tenderers for three planned solutions procurements for the National Heavy Vehicle Charging Pilot’s Large Scale On-Road Trial.

    Provision of telematics devices and services

    Provision of third-party invoicing services

    Provision of manual collection devices and reporting services

This briefing is not a procurement and does not form part of any Commonwealth procurement process. The Commonwealth will not select or exclude (from future participation in above procurements) any companies based on their attendance or non-attendance at the Industry Brief.

Following the Industry Briefing sessions, there will be a period in which the department will accept feedback submissions from industry on the proposed technical approaches to gathering data and generating invoices and mock permits.

The National Heavy Vehicle Charging Pilot (National Pilot) is an innovative industry partnership testing potential direct road user charging options for heavy vehicles. The Large Scale On-Road trial is anticipated to involve up to 100 participants providing more than 1000 vehicles across diverse industries and fleet sizes.  

Trial Participants will test several operational models for collecting and reporting distance travelled. Existing and charging-specific telematics systems will be tested, as well as non-telematics distance measurement technology (hubodometers).

No money will be collected from trial participants. Instead, the data collected will be used to generate mock invoices. The mock invoice will be used to calculate and compare alternate mass-distance and location-based charges with an estimation of annual registration and fuel-based road user charges (current PAYGO model) collected for each participant. 

END

Further details on the National Heavy Vehicle Charging Pilot are found on the Department's website. 

Disclaimer: D'Artagnan Pacific is technical advisor to the Department of Infrastructure, Transport, Regional Development and Communications

Oregon Road Usage Charge - some background

Often ignored in Europe and elsewhere, is the admirable progress made in the state of Oregon towards rolling out road user charging (called "road usage charging" to add to the lexicon of road pricing).  Oregon is, now, charging (some) cars, for using all of the roads across the state, by distance.  Only New Zealand, with the application of its weight and distance based Road User Charge has a parallel (as all diesel powered vehicles, including cars, prepay blocks of distance to use public roads there).  However, unlike New Zealand, which is a charge focused on heavy vehicles, which also captures light ones (because of the absence of diesel tax), Oregon is focused on light vehicles that have very high levels of fuel efficiency (including no consumption of fossil fuels).   It has its eyes very much on the future, as it sees this as replacing fuel tax.

The Mileage Based User Fee Alliance (MBUFA - yes "mileage based user fee" adds to the lexicon, unfortunately) has released its latest newsletter, which handily outlines what it calls the "myths" of the Oregon scheme.

Those on the mailing list for MBUFA got this, but it is unfortunately not accessible on MBUFA's website.   So I have replicated it below, in full (emphasis added where relevant).  Apologies for the US English, commentary follows.

BUSTING MYTHS ABOUT OREGON'S ROAD USAGE CHARGE PROGRAM

The Oregon Department of Transportation is first in the nation to create a per-mile charging system (thanks to Oregon's 2013 Senate Bill 810) that will help fill the widening gap in transportation funding anticipated with declining fuel taxes and rising construction costs. The Road Usage Charge Program will assess a charge of 1.5 cents per mile for up to 5,000 cars and light commercial vehicles and issue a gas tax credit to those who volunteer to participate.

Opinions on this funding model vary, from generally positive to vehemently opposed. And there are many misperceptions about what the program will do. Reactions like these were considered carefully by ODOT and the Oregon Legislature before deciding to implement the program. Next time you come up against a myth about Oregon's Road Usage Charge Program, consider the following.

Myth: It's a new tax, on top of everything else the government charges.

Fact: The road charge works as a replacement for the gas tax, not an additional tax.

Participants in the Road Usage Charge Program will receive a credit of gas tax paid while they are in the program. The system will calculate gas consumed and gas tax paid as it also calculates the per-mile charge. If the two are equal, the motorist pays nothing. If the gas tax paid exceeds road charges billed, the driver will be eligible for a refund. And if the road charge exceeds what was paid in gas tax, the balance will be due from the motorist.

As it stands, the gas tax is becoming obsolete as vehicles consume less fuel. Over time, older vehicles will phase out and the entire fleet of vehicles will become highly fuel efficient, vaporizing the gas tax. Oregon's Road Usage Charge Program is a fair and sustainable funding model that will ensure our roads are maintained safely for every motorist well into the future.

Myth: State government will now track your whereabouts with GPS.

Fact: GPS is not required to participate in the program.

Senate Bill 810, which created the Road Usage Charge Program, does not require GPS. In fact, it demands that at least one mileage reporting option not use GPS, and that motorists be given choices for the devices and reporting services they will use.

With the advent of the smartphone in 2007, many consumers have become more comfortable with GPS technology because it gives them immediate information and services at their fingertips. They may like the convenience that a GPS-enabled device offers for road usage charging-no need to switch "on" or "off" when traveling out of state or on private roads; miles are automatically recognized as billable or not. Other folks are not as comfortable, and they will exercise their choice to not use location-determination technology. Whatever their choice, having options empowers participants to select the plan that best fits their lifestyle and driving habits.

Myth: It is a disincentive to owners of fuel-efficient vehicles.

Fact: These drivers favor the fairness of road use charging.

In ODOT's focus group research (2012-13), electric vehicle owners tended to be in favor of road use charging. They appreciated the fairness of the model as they voiced their concern for maintaining our roads (on which to drive their new vehicles). They agreed that motorists should fairly pay for the roads they use.

While a road charge would be a new bill for them to pay (instead of paying tax at the pump, as they did with their old car), savings in fuel consumption far outweighed the prospect of a road charge. They were just thrilled to not have to visit the pump anymore! Also, multiple incentives were known to be available for purchasing fuel-efficient vehicles, state and federal, which added up to thousands of dollars against the purchase price.

When faced with the realization that the gas tax places greater financial burden for maintaining our roads upon less affluent drivers who purchase vehicles in the secondary market (less fuel-efficient), the logic of a per-mile charge became clear. Some said, "I want to do my part."

Turns out, every driver wants good and safe roads to drive on, no matter what car they drive.

Myth: It's unfair to rural Oregonians who drive longer distances.

Fact: Every driver is different, with no significant net difference between rural and urban.

Some say it would be unfair for rural drivers to pay a road usage charge because they must drive longer distances to do basic things such as go to work, school, medical appointments and the grocery store. While this may be true for some rural drivers, nearly all Oregon motorists already pay a distance-based tax-the fuel tax.

But the fuel tax is not a perfect proxy for road use because it imposes a higher cost per mile on people who drive less fuel-efficient vehicles. Some drivers-for example, those with working vehicles such as pickup trucks-pay much more per mile than others. Someone driving a Ford F250 15,000 miles a year pays $410 in Oregon fuel taxes whereas a Toyota Prius driver pays $90 for traveling the same total distance.

Recent ODOT surveys found no consistent theme for rural driving. Rural drivers are actually quite diverse and have many travel behaviors. Some live in towns or close to them while others live far away on working properties. Some drive short distances and less than urban drivers while others drive longer distances and more than urban drivers.

Bottom line, extremely rural Oregonians reported driving much longer distances for medical appointments and shopping, but that was offset by less frequent trips than their urban counterparts. The net difference? Not much. 

                        

Myth: A government-run system is certain to be problematic and cost a lot of money.

Fact: The program uses private sector vendors to provide high performance at low cost in a competitive, open-market system.

It's true that the cost to collect Oregon fuel taxes averages about 0.5% of revenue-a real bargain! That figure reflects a fully operational, mature program with three million vehicles. And it excludes capital costs associated with establishing the system back in 1919 (Oregon was the first in the country to implement the gas tax, too.)

Operating costs for the Road Usage Charge Program will start out high but using private vendors to manage collection will reduce system costs over time. ODOT expects vendors will use the per-mile charging system as a platform for marketing other products and services, such as pay-as-you-drive insurance, tolling, and travel concierge-or perhaps those services would serve as a platform for the road charge. Many of the costs of system implementation and operation would be borne by the industry, and their customers could benefit from value-added services, discounts, and open-market innovation and upgrades.

It's worth the investment. As the number of program participants grows and the market for value-added services expands, costs will decline substantially. ODOT estimates when the number of road usage charge payers reaches one million, operating costs will drop to below five percent of gross revenues per month.

What's more, by enlisting private sector companies to provide technology and billing service options, program participants will benefit from innovation that is naturally driven by the open market (versus a "closed" system entirely run by the government).

The "connected car" is becoming reality. Many vehicles already have factory-installed telematics systems that could be used to wirelessly report miles driven. In time, motorists may be able to simply drive and receive a bill by email that is bundled with other services, such as insurance, cable, parking or mobile phone charges. They would pay online via smartphone and roll on!

Looking Ahead

Years from now, the road usage charge model could transform the way Oregon drivers pay for the roads they use every day. It offers a way to equitably assess fees based on the value a motorist gets from the public infrastructure. And because technology is advancing so quickly, the system can maintain privacy even while delivering higher levels of service and more seamless ease of use.

No solution, not even Oregon's, can address every set of circumstances. Still, Oregonians are proud to be blazing a new trail-high-tech, responsive and practical-keeping alive our tradition of innovation that stretches back to the days of sputtering Model-Ts, roads of mud, and the nation's first gasoline tax.

My commentary

Let's be clear about what Oregon is not.   It is not a congestion charge and there is no sense that this will be a precursor to charging by time of day or location (although in the long term it is possible to conceive of pathways towards that).   What it is doing is shifting from payment of roads through fuel tax to paying for them directly, by actual use.  It demonstrates a path forward for jurisdictions that wish to transition from fuel tax (or indeed could do so with vehicle ownership/licensing taxes) to usage based charging.

Yes the Oregon scheme has a limitation, with a cap of 5,000 vehicles allowed to move onto this system.  Hopefully, the politics behind this will mean that the cap can be removed in due course, and there can be some expansion of the programme further.

Washington State and California are both watching Oregon closely, and have been undertaking their own work to develop charging programmes.  It is far from inconceivable that both will move forward in broadly similar ways, and if the entire Pacific seaboard of the United States is starting to charge cars by their actual use of the roads, maybe it will be time for other countries to catch up?

Minnesota seeks to ban public funding of studies into road pricing

A Bill has been presented to the state House of Representatives (HF389) that would effectively stop taxpayer funding of state institutions investigating distance based road pricing.  It specifically states that:

The University of Minnesota and the Board of Trustees of the Minnesota State Colleges and Universities shall not utilize state funds or resources, including but not limited to appropriations and funds provided under subdivision 1, to:

 study, test, demonstrate, evaluate, or promote a potential mileage-based user fee, or to contract for the performance of these prohibited activities; or

provide funds including membership dues to any organization regularly engaging in research or advocacy concerning mileage-based user fees, including but not limited to the Mileage-Based User Fee Alliance.

Minnesota Public Radio notes that the Bill was proposed by Republican Rep. Bob Barrett of Lindstrom.   Barrett also opposes a proposed increase in fuel tax.  His solution is that the Motor Vehicle Sales Tax be amended so that more than 60% of the revenue raised can be spent on roads.  I'd question why a sales tax on vehicles should be used for any transport funding at all, since the purchase of a vehicle bears no relationship to its usage (and you can buy vehicles out of state).   Better to scrap such a tax (making it easier to buy newer, safer and more fuel efficient/less polluting vehicles) and charge for usage of the roads.

Whilst I understand Barrett's opposition to higher taxes, the opposition to studying changes to taxation seems strange.   Is it just because he opposes the policy of charging for road use that he doesn't want taxpayer money spent on studying it?  If he opposes the use of taxpayer money for any studies into transport policy, then that would be a wider matter.  Legislating to micro-manage such spending seems counter-intuitive for someone who advocates a smaller role for government.

Long standing advocate for distance based pricing, Lee Munich, writes in the Minnesota Star Tribune against the Bill.  

The case for studying distance based pricing is clear as he says:

This approach is being seriously studied by many states across the nation for a very good reason: As the nation’s vehicle fleet becomes more fuel-efficient, and more apt to be using non-gasoline energy sources, the revenue raised by the gas tax decreases. When less gas tax revenue is raised, we don’t have enough money to keep roads and bridges safe and efficient. When that happens, people and economies suffer. And the system becomes more inequitable, as some drivers don’t pay their fair share of road costs based on their use of the road system.

For this reason, California, Oregon and Washington are all developing large-scale pilots to test mileage-based fees on the roads. Many other states are launching studies to explore these fees as a long-term alternative to replace the gas tax.

The Bill has been referred to the State Committee on Higher Education Policy and Finance.  I don't know what chances there are of this making law, but I would hope it doesn't.  A lot of work has been done in Minnesota looking at various dimensions of distance based road pricing, and there are plenty of issues worth working through, but throwing the idea away and sticking to a sales tax to pay for roads is simply economic nonsense.

Imagine paying a sales tax on buying a new mobile phone to pay for your network, or paying a sales tax on appliances to pay for electricity.  It would make much more sense to scrap the sales tax, replace it with an increase in fuel tax (for the last time) and transition towards users pays.

Footnote:  Yes I am back, and writing more regularly now

Florida advisory panel proposes distance based road pricing

Columnist Kingsley Guy in the South Florida Sun Sentinel has commented on the proposal from the Florida Metropolitan Planning Organization Advisory Council (take a breath) that the state introduce a 2/c mile tax on road use.

The proposal comes simply from concerns that fuel taxation is becoming increasingly less reliable as a source of revenue to fund the state's transportation expenditure.

The state has 12 different fuel/vehicle ownership taxes (plus two Federal fuel taxes), two of these taxes haven't been increased since 1941 and 1943 respectively (meaning they are now worth 7-8% of what they originally were set at).  3 are inflation adjusted.

Sources of Florida state transportation trust fund revenues

Black line shows where revenues have to be to remain constant in real terms

FMPOAC concludes that six options should be looked at.  These are:

- Index all fuel taxes to inflation;
- 1c optional Municipal sales tax;
- Increase State Highways fuel tax by 2c a year, above inflation;
- Vehicle Mileage Tax;
- 5c local Diesel tax for counties;
- Redirect part of fees that were shifted from transport funding to the State Transportation Trust Fund.

On VMT it said:


This recommendation is to have the Legislature commission and fund an extensive effort to deal with the systemic issues of fuel taxes becoming less sustainable as a primary surrogate for a transportation user fee. While fuel taxes served as an adequate substitute for a true user fee for decades, significant increases in mandated vehicle fuel efficiency and the introduction of all electric and plug‐in hybrid vehicles are eroding transportation revenues. It is recognized that there are significant concerns over the concept of charging users of the highway system based on each mile traveled. These include privacy of citizens, the cost of implementing such a system, and institutional issues associated with revenue sharing. This effort is intended to address these issues at a minimum, deploy a demonstration of the concept and develop a business plan and implementation roadmap to move Florida to a VMT‐based system.

Guy rightly rejects Virginia's bizarre hypothecation of a new sales tax to pay for transport, as if people who rarely drive should pay more for potholes (through their shopping) than a trucking firm does.  May as well pay for electricity through general taxation, or telecommunications.   

He notes that tolling in Florida has had a distance dimension to it, and that is widely accepted.

However, he also notes some important concerns:

- Privacy.  Suggesting an odometer only option.  Which is fair enough, as long as it cannot be defrauded.  However, privacy does need to be respected, not dismissed.  Too many wingnuts think distance based road pricing is part of a conspiracy  (one that would be far better implemented if done in cahoots with mobile phone operators!);

- Fraud.  He expresses concern about people cheating a distance based system, which is fair enough, but this can be addressed and has been elsewhere.  Enforcement is a key part to any such system;

- Visitors.  A big issue for any state only system is covering those from out of state quickly and efficiently.  I'd suggest some sort of vignette (time based charge), but there are other options too.

- Heavy vehicles.  He notes that fuel tax charges heavier vehicles more, and that there needs to be a reflection of weight as well.  He's right, and fuel tax does this very poorly, as it tends to charge the smaller trucks too much, and the heaviest ones not enough.  Notice that the trucking sector can often be very unhappy about better pricing of roads, partly for this reason.

- Transition.  He wonders if there may still be a fuel tax as well as distance charging.

He also notes that there remains an issue of poorly spent money, which is separate from that.

I'm encouraged that Florida is starting to look at this issue more seriously.  The state has done well to use tolls to a wide extent, which has helped it a great deal and will help it with any transition to more direct user charging.  However, it could do worse than look at progress in Oregon, and the lessons learned from distance charging in other countries as well.

Advocates of distance based road pricing look to Oregon in the coming months

I've written before about Oregon's efforts to develop a Vehicle Mileage Tax intended for the most fuel efficient vehicles to replace its fuel tax.  It has successfully run a pilot of various technologies and systems, with the intention being that it become a mandatory requirement for all vehicles with a fuel efficiency above the threshold of 55 Miles per Gallon (5.1 litres per 100km).   Key is choice, with there being technology and non-technology options, with both private and public sector provided options.

It is expected that there will be vote this week in the Oregon House of Representatives for House Bill (HB) 2354B in the House Revenue Committee.  The expectation is that it will be passed onto the Joint House-Senate Ways and Means Committee.  HB2354B identifies all vehicles that get an estimated 55 MPG or better being subject to distance based tax.

In the Senate, there is a Bill (810A) that provides for a volunteer programme of 5,000 to choose to pay on a distance basis in the state.  

It may be that the Bills will merge meaning that (guess) all vehicle 55MPG or better get taxed up to the first 5,000 that want to volunteer (although I'm unsure quite why many would do so).   If it were up to me, I'd start off with all newly registered vehicles (there are hardly any in that category now anyway).

The House Bill needs a 60% majority because it is a new, mandatory, tax measure. The Senate Bill, because it authorises a voluntary measure, only needs a simple majority to pass.

Whatever happens, one of the bills or a merged one may go for a vote in the next month or so.  That would authorise the implementation of the first VMT/distance based road usage charging system in the USA for cars.

It would be a huge step in policy, albeit a small impact on almost all Oregonians. However, it would provide a basis to protect future revenues for highways in the state.  As vehicles become more and more fuel efficient, more will shift from paying by fuel tax to paying by distance.

If Oregon demonstrates that this can be done, in a way that largely has public acceptability, that doesn't threaten privacy or mean people are paying more than they should for roads, then it opens the door for other US states (and other countries) to start making this transition. 

One way of incentivising a shift towards distance based congestion charging

The very name "congestion charge" (or tax or fee) turns many people off, and introducing any form of additional charge will automatically generate opposition.

So what's one way of both moving towards better pricing that isn't just about a shift from ownership fees to paying for usage, but also charging according to time and location?

David Hensher, Director of the Institute of Transport and Logistics Studies at the University of Sydney proposes one way on the website The Conversation.

He suggests not just introducing a new charge, but by lowering vehicle registration fees in exchange for paying for distance for motorists in Sydney (with a charge only at peak times for driving in Sydney).  He proposes a 50% cut in vehicle registration fees in exchange for this new charge.

He claims it would reduce peak kilometres driven by 4.7%, but more importantly by offering choice it makes road pricing far more acceptable as an alternative to the status quo.

He continues:

This road pricing reform plan would require drivers to purchase an on-board unit (approximately $50 one-off cost), that will record the kilometres by time of day. The off-peak kilometres are not charged, but peak kilometres will be charged at the agreed rate.

This scenario implies that if a unit is not installed, all kilometres will be charged as peak kilometres. So there is an incentive to install a meter (with the expectation that all motorists will do so), just like households have had with off-peak electricity meters or with water meters when they were first introduced.

Of course to charge all kilometres there would have to be a reliable way to charge them without the on-board unit, as odometer tampering would be encouraged.  An alternative would be simply to hike up the vehicle registration fee as the alternative.  

The on board units would also need to identify location, because peak driving in rural New South Wales is meaningless, so I'd suggest a broad cordon that started at the metropolitan edge of Sydney, and maybe one or two other cities like Newcastle and Wollongong.  It would be better to be more refined than that of course.   Of course if it applied across the whole state, then there would have to be an off peak charge (and there would be merits in reducing vehicle registration fees to simply administrative charges) related to infrastructure costs. 

Such an approach could attract a lot of interest, and lay a platform for a longer term shift from fuel taxation.

His suggestion got 80 comments on the website, some complimentary, others sceptical, but overall it is a good contribution to the debate about how to move towards distance based charging, by offering savings on ownership taxes in exchange for some form of peak charging.

This is, of course, only an option in jurisdictions with quite high ownership taxes, but it is promising to see that the debate is happening in Australia on this.

Mileage Based User Fees - what's going on in the US?

Mileage Based User Fees (MBUF), Vehicle Mileage Taxation (VMT), distance based charging, distance based road user/usage charges, these are all different terms for essentially the same thing, which to me is simply road pricing with the base chargeable event being distance.

I attended and spoke at the IBTTA's Transportation Finance and Mileage-Based User Fee Symposium in Philadelphia a week ago (which explains the gap in blogging). Whilst the presentations from that Symposium will shortly be available here, I thought I'd give a quick summary on some of the interesting points I picked up from the occasion.

It's worth noting that the Mileage Based User Fees Alliance (MBUFA) has a new website with some useful content including "five myths".  It should be a useful platform for updates on the development of distance based road pricing in the United States, as various states pursue different approaches to this solution for raising revenue to pay for roads.  I met Barb Rohde, Executive Director, who is enthusiastic about MBUFA, and I sincerely hope it shows the baton of developing such systems is moving more clearly from Europe to the United States, which faces some different challenges (as in Europe many such systems have been in addition to existing charges and have only been applied to heavy vehicles).

I obviously did not go to every session, so my summary really only notes a few points I wasn't previously aware of.  As usual, if anyone has a different recollection or believes the statements below are not true, I'd appreciate any comments:

30 June 2013 is key for Oregon, as it will be the point by which the state legislature ought to have passed the bill to authorise the introduction of distance based charges for ultra-fuel efficient vehicles (all vehicles with fuel efficiency of greater than 55MPG).  If it does, then Oregon is on the way to being the first state in the US to introduce distance based taxes for cars.  If not, then it is expected that further work will be done on the proposal (as it is not significantly controversial at present).

More people are killed in road accidents in California due to poor road maintenance, than from alcohol or drug use while driving combined (not directly a fault of road pricing, but ought to cause some serious rethoughts of the state's governance of highways).

Pennsylvania is increasing fuel tax by 5c/gallon (1.3c/litre) per year for the next five years, all of which is to be dedicated to transport funding.  78% to roads, the rest to public transport.  This in itself wont be enough, and will be supplemented by tolls where feasible.

The Pennsylvania Secretary of Transportation, Barry Schoch, said that he would surrender 12c/gallon in gas tax if he could be allowed to toll the interstate highways in the state.

Former Governor of Puerto Rico, Luis Fortuno, said that the territory did not look to the United States to provide a model of PPP type funding for highways, but rather Canada, the UK and Australia provided the most relevant and useful experiences.  I've written previously about Puerto Rico's radical approach to privatisation of its tolled highway network.

Sweden is currently looking at using existing interoperable DSRC toll tags in foreign vehicles travelling in the country to apply the congestion taxes of both Stockholm and Gothenburg to foreign vehicles.  In both cities, foreign registered vehicles are exempt.  Many Norwegian registered cars have toll tags (given Norway's extensive toll road network).

Conclusion

Overall, a lot is riding on Oregon, with Washington State following close behind and increasing interest from the likes of California.  Whilst work has been done in Minnesota and Colorado, it doesn't appear that either state is very close to making progress in distance based charging.   The biggest conclusion I derived from the event was that quite a lot of states are interested and following what is happening, but few are willing to do more than investigate options at this stage.  Certainly one trick few have noticed is that distance based charging could be lucrative in charging transit traffic.

A few states have moved on increasing "gas tax" or using other taxes to help plug the gap, but the bigger trend does appear to be more use of what I would call "conventional" tolling - using tolls to help fund new infrastructure by tolling the new infrastructure itself.  There is also interest in using existing toll facilities to cross subsidies adjacent roads.

If Oregon presses forward, I expect momentum to come from Washington state and possibly California (although it is far more difficult there).  I also expect other states to start to show serious interest in distance based charging as an option.  If it stalls, the problem of revenue will remain, but I still expect many states to expand the use of tolling regardless.  That remains an option for many (and most states still have more scope to use tolls) and states such as Texas and Florida remain at the forefront of expanding tolls.

What is sadly lacking in all of the debates around revenue for roads in the US is discussion about governance, delivering better value for money in road maintenance and construction programmes and moving to distance based pricing because it is fairer and will result in more efficient economic outcomes (even ignoring charging by time and place).

Moving to charging motorists directly according to usage and away from proxies like fuel tax means some serious additional questions need to be asked:

1.  What should be the basis for the level and schedule of charges?  The default has been to match existing gas tax levels, but it would make far more sense to understand what levels of revenue are needed to maintain and improve highway networks, and how to allocate the cost of doing this amongst groups of road users.  That debate simply doesn't happen, and currently means significant transfers between different taxpayers/road users on grounds that are far from efficient.

2.  What should decide on what such revenue should be spent on?  The default has been to assume that the predominantly engineering based assessments of what is needed is an efficient and appropriate measure of future spending.  This seems difficult to sustain given that these assessments are not based on market or commercial measures of optimising expenditure, returns or costs, but rather bureaucratic/political measures which in most other sectors it would be recognised as being inferior.   Giving motorists confidence that they are getting value for money is critical to building support for user charges, and to do that there needs to be greater involvement of the private sector, more commercial imperatives in decision making and a withdrawal of politics from decisions on specific projects.  Longer programmes of expenditure, dedicated budgets over multiple years and performance based contracting and asset management systems (all of which are the norm in some other developed countries) could save up to 20% of the costs of maintenance.  Motorists and taxpayers are right to ask if money is well spent, I'd be astonished if a serious investigation into applying global best practice didn't show scope for significant savings in spending on US highways.

3.  What sort of entities should be operationally responsible for US highways in the future?  This follows the previous question, but comes about when there is a new relationship between road users and road providers.  When people are charged directly for road use, they will expect customer service, they will make queries and complaints.  They will want a better service than they currently get for licensing vehicles and drivers, and it is an opportunity to use the feedback from that relationship to improve how roads are managed.  I doubt very much whether traditional DoT structures are the best way to achieve that, and that the possible options include looking at establishing separate stand alone agencies, with independent boards supervised by DoTs, as a first step to developing fully professional providers of highway services.

Meanwhile, there is plenty of cause for the US to be proud that it is having this debate.  There remains a climate of denial over declining fuel tax revenues in Europe.  In Australia the debate has emerged, but hasn't quite progressed as far (although Australia's governance of highways and system of setting charges is more sophisticated than what is seen in most US states).

May the debate continue, may Oregon progress and may more US states start to ask the hard questions about revenue options, but also the more difficult questions I have listed above.  You cannot separate revenue raising, from charge setting, expenditure management and highway governance and expect to make transformational changes.