Toll Roads and the Shift to Mileage-Based Fees

Revolutionizing Highway Funding: From Fuel Taxes to MBUFs

Toll roads, constituting 8.2% of U.S. limited-access highway lane miles, play a significant role in the nation’s infrastructure, including major highways like the Florida Turnpike and the New York Thruway. Most are managed by public agencies, but some operate under public-private partnerships. As the U.S. considers shifting from per-gallon fuel taxes to per-mile charges, the role of these toll facilities comes under scrutiny.

This article is a summary. Please read the original article by Robert Poole on the Reason Foundation think tank website, here

The central question is: will toll agencies be necessary if all roads implement direct user charges? This topic, raised at a 2022 International Bridge, Tunnel and Turnpike Association conference, remains largely unexplored.

Toll roads offer distinct benefits: guaranteed maintenance through toll revenue bond agreements, a robust user-pay system, and self-financed infrastructure improvements. These advantages contrast with non-toll highways, often dependent on fluctuating state funding.

The shift towards mileage-based user fees (MBUFs) or road user charges (RUCs) faces challenges in gaining widespread support. Concerns include the perception of MBUFs as an additional tax, privacy issues with government tracking, and potential disadvantages for rural drivers. However, pilot projects have shown that rural motorists might benefit from MBUFs, as they often use less fuel-efficient vehicles.

To address these concerns and stay relevant, the toll road industry could lead the transition to MBUFs. This involves restructuring toll charges on a per-mile basis, with necessary legal and financial adjustments. To demonstrate that this isn’t an additional tax, states could refund gas taxes for miles driven on toll roads using MBUFs. This strategy, starting with toll roads, could eventually extend to all limited-access highways, significantly reducing the state’s reliance on fuel taxes for road maintenance.

Ultimately, toll agencies face a choice: maintain the status quo or pioneer the shift to per-mile charges, demonstrating a customer-friendly approach to transitioning from gas taxes and ensuring their relevance in future transportation funding.

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