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.

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Photo courtesy Chris Chan via Flickr