The NCSL Foundation for State Legislatures is undertaking a partnership to study alternative transportation user fees. The partnership will convene state lawmakers, legislative staff and private sector partners for a series of in-person meetings to learn more about the benefits and challenges of various transportation user fee options. The in-person meetings will culminate in an online toolkit highlighting two to four transportation user fee alternatives agreed upon by the steering committee and sponsors. The partnership commenced in December 2022 and will conclude in early 2024.
This partnership is coming at a crucial point, as the current make-up of transportation user fees is heavily reliant on motor fuels tax revenue. Fuel taxes make up the largest share of state transportation revenue funds—38.7% in 2021, down from 41.1% in 2018, according to the National Association of State Budget Officers. With the proliferation of electric vehicles and highly fuel-efficient vehicles, forecasts indicate fuels tax revenue will decline further as vehicles become more fuel efficient or use no fuel whatsoever, with states predicted to lose as much as $87 billion in revenue by 2050, according to the engineering firm CDM Smith. Since the early 2000s, states have led discussions on replacing or supplementing revenue lost to vehicles that do not consume fuel. Several states have studied, piloted or implemented road usage charging programs, in which drivers pay a fee based on the number of miles driven, to preserve the user-fee principle of paying for roadways. The legislatures in Oregon, Utah and Virginia have created voluntary, operational RUC programs.
Another way to address falling gas tax revenues is to collect a fee from drivers when they charge their electric vehicles. In these systems, public EV charging station users pay a per-kilowatt hour fee based on the energy they consume to charge their vehicles. At least four states—Iowa, Kentucky, Oklahoma and Pennsylvania—have enacted such fees, with each state allocating most of the revenue collected to fund transportation infrastructure such as road and bridge maintenance.
More states are also instituting tolling, sometimes as part of managed-lanes systems that let drivers choose a tolled lane or a free, general-purpose lane. Georgia and Colorado are among the states increasingly embracing managed lanes for metro areas to alleviate congestion and raise revenue for roadway operations and future road improvements.