User fee plan enters 2019 highway funding debate

Improving roads and bridges with fees collected by a mileage-based usage system as an alternative to raising federal fuel taxes is on the table as Congress begins fresh debates over how to pay for infrastructure.

The Competitive Enterprise Institute (CEI), a Washington, D.C.-based libertarian think tank, sent a letter to Congress today asking lawmakers to support a voluntary nationwide user-pay pilot program, for both cars and heavy-duty trucks – asserting that fuel taxes will become increasing regressive as vehicles become more fuel-efficient. CEI is leading a 17-member coalition supporting the program.

“As Congress begins considering the future of the Highway Trust Fund, its top priority should be restoring the longstanding users-pay/users-benefit principle,” the letter states. “Further increasing the reliance of the Highway Trust Fund on revenue streams untethered from use, as well as general fund bailouts, would not only fail to address the core fiscal challenges of the present, it would threaten the future health of America’s highways.”

The user-fee system concept has been researched for years, with most of the studies being done at the state level. The most recent version of the surface transportation bill, the FAST Act, set aside up to $20 million per year, through 2020, for state grants aimed at user-based demonstration projects.

“We’ve been big proponents of those projects,” CEI transportation policy expert Marc Scribner told FreightWaves. “However, it’s one thing to do it in a state, but issues such as interoperability with the federal Highway Trust Fund would require a national program for answers and to potentially transition towards a road user charge system.”

The debate over infrastructure – what a potential package will look like and how to pay for it – is gaining momentum in the White House and on Capitol Hill. President Trump met last week with economic advisors to discuss how to move on infrastructure once the shutdown ends, according to reports.

Representative Earl Blumenauer, a Democrat from Oregon who sits on the House Ways and Means Committee – which will be influential in devising “pay for” mechanisms for any infrastructure plan – is working on legislation to raise the gas tax by five cents per year starting in 2020, according to Politico. Raising the gas tax has been a political non-starter for years, however, despite the current backing from powerful lobbying groups such as the U.S. Chamber of Commerce and the American Trucking Associations.

But CEI contends that the leaders of the House Transportation and Infrastructure Committee, Chairman Peter DeFazio and Ranking Member Sam Graves, are both open to considering a road usage charge system to eventually replace fuel taxes. “We think having their support is a great starting point for discussions,” Scribner said.

Issues that would need to be worked out for installing the pilot program, Scribner noted, include how to reimburse fuel taxes that would be collected at the same time user fees are being charged, because “no one is going to be paying for the privilege of being in a pilot program.”

A longer term issue to consider for the trucking sector – if a user fee system were to eventually be installed – is the cost for equipment, Scribner pointed out.

“We’ve already seen the divide between large carriers and owner-operators over the electronic logging device mandate, with equipment cost burdens significantly higher for independent owners than for fleet owners. That’s obviously something to look at in the future.”