Transportation Finance: An Unexpected Source of Innovation

As vehicles become more fuel efficient and clean alternative fuels increase in popularity fuel taxes may no longer serve as a reliable source of revenue for funding highway and transportation improvements and maintenance. This report emphasizes how local governments can promote a shift from fuel taxes to mileage fees which provide stable revenue sources and more efficiently align tax burdens with travel distance. Mileage fees can also provide better data for planning and operations and improve efficiency by incentivizing travel decisions and vehicle choices that reduce traffic congestion, air pollution, and excessive road wear. The report also highlights effective implementation approaches, that address system requirements, technical designs and public acceptance.