Mileage-User-Fee Pilots Given $14 Million in Federal Funds

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By Paul Shukovsky and Leslie A. Pappas

Aug. 31 — The Federal Highway Administration has awarded seven states $14.2 million to figure out how to best charge drivers for miles driven rather than gasoline consumed.

Coming in an era when fuel-efficient vehicles are impacting gas-tax funding for highways, the state pilot projects are intended to “address common challenges involved with implementing user-based fees such as public acceptance, privacy protection, equity and geographic diversity,” the agency said in an Aug. 30 press release.

California, Delaware, Hawaii, Minnesota, Missouri, Washington and Oregon received grants through the Surface Transportation System Funding Alternatives program, part of the Fixing America's Surface Transportation (FAST) Act.

Oregon was the first in the nation to launch a large-scale test of taxing miles driven rather than fuel consumed in a program that began in July 2015. The state Department of Transportation plans to use its $2.1 million grant to further refine the pilot called OReGO, ODOT spokeswoman Michelle Godfrey told Bloomberg BNA Aug. 31. The issues faced first in Oregon are being encountered in many other states.

‘Privacy Paramount.'

Chief among them are privacy concerns on the part of drivers worried that GPS devices used to keep track of miles driven could also be used to track their movements. But ODOT polling data shows that those concerns have waned over time, Godfrey said. She declined to provide specific numbers, saying the data has yet to be published in a final report.

OReGO offers its 1,263 volunteers a variety of technologies to keep track of miles. Godfrey referred to that when she said: “What is even more compelling is that 75 percent of the vehicles that enrolled in the program have GPS. So when it comes down to it, people are choosing GPS,” with its inherent tracking capability.

“But this is a very sensitive process and the privacy issues are still paramount,” Godfrey said. And while there have been “very few glitches, we need it to work as smoothly as possible so it is very easy for people to use.” To that end, the grant money will be used in part to explore using an in-car telematic system such as OnStar or factory-installed navigation devices, she said.

To accommodate older vehicles without digital capability, Oregon will also seek to develop manual mileage reporting methods.

Rural-Urban ‘Misconception.'

Many rural drivers are concerned that they would pay more under a mileage fee taxation regime because of the long distances they drive. Godfrey said that's the number-two concern revealed by polling data. She called it a misconception.

“That’s actually false because the more you drive, the more you pay in gas tax,” Godfrey said. “They might actually save money because folks in rural areas are typically driving lower mpg vehicles like trucks, so they pay more gas tax.”

Asked what she is hearing from colleagues in the other state DOTs that along with Oregon are part of the Western Road Usage Charge Consortium, Godfrey said: “The issues are generally the same, but the order of their importance might be different. I know the urban-rural driver issue is probably tops for a number of states in the west.”

Oregon is also administering a $1.5 million grant for the consortium on how to integrate programs so that mileage driven by visitors from other states will be captured to generate revenue. “At some point, if Washington, Oregon and California all had road user fee programs, it would be great if you drove into California for example that you pay California for those miles.”

Taxing Miles on I-95 Corridor

The federal government made just one award on the east coast: a $1.49 million grant for a project submitted by Delaware on behalf of the I-95 Corridor Coalition, a partnership of transportation agencies, toll authorities, public safety and related organizations in 16 states from Maine to Florida, plus the District of Colombia. The project will explore the challenges to implementing a mileage-based system across multiple state lines, such as charging for cross-state travel, coordinating with toll facilities and motor vehicle departments, and setting per-mile rates across several states.

The project—using existing technology in a pilot of about 50 people per state—will attempt to answer the question: “What happens when you have an individual who can drive through four or five states in a day,” Patricia G. Hendren, executive director of the I-95 Corridor Coalition, told Bloomberg BNA Aug. 31. Delaware and Pennsylvania have already signed on, and participation of several other states is now being finalized, Hendren said.

The privacy concerns that emerged on the West Coast may become even bigger issues back east, Hendren said, because drivers will have their information shared with multiple states. The urban-rural divide may also come up in states such as Pennsylvania, she said.

OReGo is still seeking additional volunteers to join the program. The program was capped at 5,000, but has only 1,263 vehicles participating. “We didn’t know what to expect,” Godfrey said. “When you are recruiting volunteers to participate in a tax program, that can be a little challenging.” She said there are enough participants to conduct the pilot.

To contact the reporter on this story: Paul Shukovsky in Seattle at and Leslie A. Pappas in Philadelphia at

To contact the editor responsible for this story: Ryan Tuck at

For More Information

More information about OreGO is at

Text of Delaware's application for the Surface Transportation System Funding Alternatives program is at

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