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  • Writer's pictureInfrastructure Exchange

Is a road user charge an alternative to fuel taxes for road development?

According to the Information Technology and Innovation Foundation (ITIF), there is an opportunity for the US federal government to take advantage of GPS technology to establish a national "road user charge" (RUC) system. This, the group anticipates, could replace fuel taxes.

The foundation is presenting its proposal to lawmakers on 25 April as Congress debates how to pay for highway infrastructure.

"A Policy User's Guide to Road User Charges," proposes legislation to implement a national RUC system. It suggests this would require a transition period of at least three to five years - this in order for the technology to be developed and for the rollout of a national payment system to be undertaken.

"During this period, electric-vehicle adoption will grow, further weakening the gas tax as a sustainable funding method for the highway trust fund," according to the ITIF plan.

The US Highway Trust Fund will run out of funding by 2021 and ways are being considered to raise money for infrastructure funding. One of the suggestions is to raise the current tax on fuel.

It is anticipated that the commercial transport industry may not be able to pass along all the costs associated with an RUC system to customers in the short run, yet "truckers should be able to do so in the moderate term and long term if the fees are stable or changed with sufficient advance notice."

Further, ITIF says a government mandated, per-mile pricing policy would create incentives to combine shipments in ways that minimise trip mileage, citing Germany's heavy-vehicle road pricing system that led to a 10% drop in empty trucks on long-distance trips, and a 7% increase in containers moved by train.

Under consideration at the moment is a move to increase fuel taxes by 20 US cents over four years, raising $340 billion.

The American Trucking Associations (ATA), has rejected user fees as a costly and ineffective way to pay for infrastructure, saying there were "several unsupportable assumptions" made regarding infrastructure funding.

"It assumes that an RUC, which is really just a new term for a vehicle miles traveled tax, would better align to increased system costs, but this isn't as simple as the paper suggests," ATA spokesman Sean McNally told FreightWaves. "For one example, it suggests increasing fees based on the number of axles a vehicle has, yet the more axles a truck has, the less pavement damage it does. This is just one factor that would make it extremely difficult to calculate fair fees for vehicles."

McNally also said that the ITIF "assumes without evidence motor carriers would easily be able to pass on this new cost to shippers. If these charges can't be passed on, it would have significant implications, particularly for smaller carriers."

In addition, the policy paper "entirely glosses over the administrative overhead that would be involved in collected the RUC," he said. "Much like tolls or other VMT schemes, this new financing tool would require a massive new compliance and collection bureaucracy which is totally unaccounted for in this report."

You can find out more about road infrastructure funding in Africa at the upcoming Africa Road Infrastructure and Investment Congress, taking place in Nairobi in September.

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