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MEC releases report exploring mileage fee to fund transportation system

MEC today released a report that explores the possibility of funding Michigan’s transportation system by charging motorists based on the distance they drive.

One key advantage of a mileage fee is its fairness, the report says. The damage a vehicle does to roadways depends on how far it travels and how much it weighs, both of which can be accounted for in a well-designed mileage fee.

Another benefit is that charging per mile avoids one of the pitfalls of Michigan’s current per-gallon tax on gasoline: As vehicles become more fuel-efficient, revenue from that tax will continue to shrink. By charging based on distance driven rather than fuel burned, a mileage fee could provide a more stable source of funding for our transportation system.

Oregon already has begun implementing a limited mileage fee policy, and other states—including Texas, Minnesota, Florida, Iowa, Wisconsin and Nevada—have studied it as a funding option.

Of course, as a Detroit Free Press story on the report noted, privacy concerns and other hurdles would have to be cleared before such a system could be implemented. But MEC President Chris Kolb said having a discussion now will help Michigan establish a transportation-funding mechanism that is fair, efficient and sustainable in the long run.

“We think a mileage fee is worth examining as a potential future revenue source for our state’s transportation system,” he said. “Implementing the fee would likely take the better part of a decade, so it makes sense to start the conversation and see if it’s the right fit for Michigan.”

As a world leader in automotive technology, Michigan is a natural fit to develop the technology and policies a mileage fee would require, Kolb added.

MEC commissioned the report from SMART, a transportation research initiative at the University of Michigan. The two groups held a briefing on the report this morning in Lansing, followed by a panel discussion featuring Kirk Steudle, director of the Michigan Department of Transportation; John Austin, nonresident senior fellow with the Brookings Institution; and Conan Smith, executive director of the Michigan Suburbs Alliance.


Photo courtesy Chris Chan via Flickr.


  1. I would support such a revenue collection system. I have long advocated going away from a price/gallon or sales tax option and using the cost/mile method. Another key aspect of this option is to capture funding from hybrid and alternative fuel, including electric, vehicles, that are using less, if any gas or diesel.

    Just make sure that whatever method is used, local county, city & village road agencies share in the revenue through the existing Act 51 Major/Local road funding program. Also, make sure that the State Legislature keeps its hands off the revenue & devotes it exlusively to road funding, not to fund other general fund needs/desires.

    May 23, 2014
  2. Jeff Hayner #

    A per mile surcharge is only fair if it is applied to all vehicles, using any public roadway, with no exceptions, and calculated based on the ESAL ( Equivalent Single Axle Load) of the vehicle in use. This means no waivers for public transit buses, which typically cause 525x the damage of a single car, per mile driven. Any vehicle that uses the roads, pays for it, in accordance with the damage done, based on ESAL, or it’s an unfair system, and should not be put in place. It is time that public transit buses own up to the damage they cause to our roads, at 38,000 lbs each. A fully loaded bus is taking 40 cars off the road? The set the ESAL with a modifier, for instance, a bus would only pay 400x what a car pays, not 525x.

    May 23, 2014

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