Relying on gas taxes to sustain the federal highway trust fund and state road improvement and maintenance programs is doomed because cars keep getting more fuel efficient. Public Works Financing readers will certainly be familiar with this trend. Electric vehicles do not pay any fees for using roads, which lots of people rightly view as unfair. Enter road usage charges—the solution of choice for people that spend a lot of time thinking about declining gas tax revenue. Mileage-based road usage charges as a replacement for the per-gallon gas tax are enticing for sure. Everybody should pay in proportion to what they use and nobody should get a free ride. Emerging technology lets us count and identify where miles are driven and generate bills. Indeed, USDOT is poised to spend $95 million to research and test road usage charging over the next five years through the Surface Transportation System Funding Alternatives (STSFA) grant program. As I explain below, this money should be spent exploring other ways to support the national highway system.
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