Wisconsin is most recent state to consider mileage-based user fee

By Robbie Webber

Wisconsin is the most recent state to consider a mileage-based user fee (MBUF). The Transportation Finance and Policy Commission, created as part of the 2011-2013 biennial budget, recommended consideration of the fee in addition to current gas taxes, licensing, and registration fees. The commission was created in part because of an $8.7 billion estimated gap over the next ten years between projected revenues and what is needed to maintain existing roads and finance projects to which the state has already committed.

Although other states have considered such fees, none has yet been implemented. In April, though, Minnesota completed a test of both technology and participant satisfaction with a MBUF. Participants could choose either a flat per-mile fee based on an odometer reading or could opt for a variable fee using a GPS unit. Although participants initially expressed privacy concerns over use of the GPS unit, the majority of participants eventually opted to use the unit in order to receive a discount over straight odometer readings. Minnesota also partnered with the ACLU to assure privacy concerns were addressed. During an Oregon study, similar concerns were lessened when participants learned they could choose a number of private-sector technologies to track mileage.

Most states that have investigated MBUFs also rely on GPS technology to allow dynamic pricing, such as time of day or location pricing, making driving on busy urban highways more costly than rural or local roads and peak-hour usage more expensive than off-peak. However, Wisconsin’s task force recommended reliance strictly on odometer readings. An additional drawback to this approach is that is does not allow for discounts for out-of-state travel.

Although the political climate is hostile to additional taxes, many states are realizing that they have little choice but to find new revenues for their transportation systems. Although no state has yet implemented a MBUF, more are inching closer and testing both the technological and political waters to find the best system.

Robbie Webber is a Transportation Policy Analyst at SSTI.