Phase one of NHDOT’s STSFA grant examined RUF revenue projections, along with key factors including equity, public outreach and policy design options. Phase one’s results will be used to inform phase two’s potential development, which could involve an interim testing step, a small-scale implementation or a full statewide implementation.
NHDOT has completed its phase one activities. In February 2020, NHDOT issued a final report which concluded: “the imposition of a RUF program would increase statewide revenues while making revenue flows more consistent.” NHDOT activities addressed revenue estimates of a potential new RUF compared to existing motor fuel tax revenue while exploring uncertainties that could impact such projections. Equity dimensions were explored concerning urban versus rural drivers, income groups and residents versus visitors. Public opinion polls and focus groups were also conducted. Finally, the report outlined four options to establish RUFs including the advantages and disadvantages of each option.
Proposed annual RUFs that were studied ranged from $10 for vehicles with an EPA fuel economy rated 20 mpg or less up to $125 for non-gasoline vehicles including electric cars. Fee increases were based on a vehicle’s fuel-efficiency and the study assessed higher fees in increments of 10 mpg. Vehicles rated between 21 mpg and 30 mpg would pay $25 annually, increasing to $50 for vehicles between 31 mpg and 40 mpg and to $75 for vehicles between 41 mpg and 50 mpg. Vehicles over 50 mpg would be subject to a $100 assessment. All light-duty vehicles with a vehicle weight rating under 8,500 lbs. would be subject to RUFs when a vehicle’s annual registration is processed. RUFs would be expected to generate $27.1 million in the first year, increasing to $42.7 million annually by 2030.
Phase one’s final report in February 2020 concluded that “the imposition of a RUF program would increase statewide revenues while making revenue flows more consistent.”
Additionally, recommendations discussed public outreach on RUFs in general and why it is needed noting, “Gas tax revenue appears likely to decline over the next decade… in the range of 10% to 25% from 2020 levels” or approximately $30 million cumulatively by 2030. Statewide focus groups were held in October 2019 to understand residents’ perceptions of transportation funding and their reaction to the proposed RUF funding structure. While survey results indicated 41% of participants supported increasing state investments in transportation, nearly half opposed doing so by establishing RUFs or increasing fuel taxes in particular.
Equity implications addressed annual miles driven by different drivers, vehicle age, urban and rural geography and income. One notable issue focused on how different populations would be affected by fuel taxes and RUFs, with the report highlighting revenue contributions by owners of non-gasoline vehicles and highly fuel-efficient vehicles that drove less than 10,000 miles annually would be “substantially lower than drivers of less efficient vehicles.” The report mentions this because RUFs are collected at a fixed rate regardless of the total number of miles driven.
A notable point in the final report also found that discussing RUFs with the legislature and focus groups was important. NHDOT notes it found RUFs would be a relatively minor cost compared to total annual fuel costs paid by all income groups. Further, owners of fuel-efficient and electric vehicles would still save significantly on annual fuel costs, even after fuel taxes and RUFs were included. “On a per-vehicle basis, the incidence of gas tax shows little variation, ranging from $90 annually for the lowest income group to just over $100 for the highest groups; and the RUF would average $21-24 per year for all groups.”
In terms of geographical equity, the study examined drivers in four geographic classifications taken from the National Household Travel Survey that apply to New Hampshire - Second City, Suburban, Small Town and Rural. The report found RUFs “would constitute a higher relative proportion of transportation costs for the state’s urban and suburban drivers than it would for its residents of rural areas and small towns. With regards to driving habits of New Hampshire residents versus visitors, the report discussed the fact out-of-state drivers would not be paying into a RUF system.
Phase one’s final report detailed recommendations and potential next steps. For example, passing legislation to list the EPA’s combined fuel economy rating on new vehicle titles, as well as clarifying registration processes for vehicles without an mpg rating. A notable technical element also addressed the role of local clerks, who register vehicles on the state’s behalf, in determining mpg ratings. Potential options to ease implementation issues at the local level included manually matching mpg ratings to a vehicle and relying on approximate, rather than exact, ratings upon registering a vehicle. Other options discussed creating a database with vehicle identification numbers (VIN) and using automated processes to transfer mpg ratings by VIN to local clerks.