Estimating Revenue-Neutral Mileage-Based Fees for Urban and Rural Households in Eight Western States

Abstract

This paper focuses on one alternative source of revenue—a mileage-based user fee—as a potential substitute for the current gasoline excise tax. It examines one of many questions that arise when this source of funding is considered—the potential for differential financial effects on urban and rural households. The issue has been characterized as one of “equity,” and more specifically whether rural households will pay a disproportionately greater share of the costs if states transition from a fuel-consumption-based to a mileage-based funding system. This paper presents an approach to address this question using existing sources of data and a set of assumptions designed to assess a “revenue-neutral” substitution of mileage-based charges for the current gasoline excise tax. Based on the methods used in this paper, it appears that rural households may, in fact, benefit from introduction of a mileage-based fee because they will pay less than under the current system in all states investigated for this study.

Estimating the Equity Effects of Adding Additional Parameters to a Mileage-Based Road Usage Charge for Seven States

“…This section briefly describes the components of the distributional analysis process. The analysis builds on the work described by Fitzroy and Schroeckenthaler ( 18 ), following the same methodology for analysis of household travel, the vehicle fleet (using publicly available tools), and geographic classes (the importance of which is descibed by Crandall and Weber), and extending that methodology to better capture alternative fuels and calculate equivalent rates for a wide variety of formula structures ( 27 – 29 ).…”

“…See Fitzroy and Schroeckenthaler ( 18 ) for details on the methodology for household travel behavior estimates (using work done by the Bureau of Transportation Statistics with the 2009 NHTS estimating regression coefficients for the urban, suburban, and rural tracts of each census division) and analysis of each state’s vehicle registration database (to determine the fuel types and average fuel efficiency for vehicles in each census tract).…”

“…The census tract geography was chosen because individual counties can contain several travel behavior patterns. See Fitzroy and Schroeckenthaler ( 18 ) for more on the classification based on the Rural Urban Commuting Area codes. McMullen et al provided another specialized classification scheme for this type of work—dividing Oregon into eight regions based on OHAS travel behavior ( 9 ).…”

“…Researchers have attempted to provide more detail and nuance especially in relation to vehicles and travel behavior by using state-specific data, including travel surveys ( 8 , 12 ) and vehicle registrations ( 15 ). The authors have previously worked to address these issues using a high level of geographic resolution, state vehicle registrations, and statistical estimates of travel behavior rather than limited survey responses ( 17 , 18 ).…”

Household Transportation Energy Affordability by Region and Socioeconomic Factors

“…Miller( 19 ), Mattingly and Morrissey ( 20 ), and Saberi et al ( 21 ) found that suburban locations tend to spend more on transportation overall (both vehicle fuel and public transit) than city locations. Fitzroy et al ( 22 ) found that households in rural and mixed geographic areas tend to drive longer distances, but they also drive less fuel-efficient vehicles and do not have the same levels of market penetration by electric vehicles.…”