Mileage-based User Fees, the Next Best Thing for Georgia Transportation

By Chris Denson and Benita Dodd

Consumers accept it from taxis, airlines and transit systems (mostly), and water and energy utilities: a bill, based on how far you go or how much of a product you use. You know what you are paying for because your invoice explains it.

This is not the case at the gas pump. Most motorists, while vociferously opposing a per-mile charge, have no idea exactly what their fuel taxes pay for. In Georgia, happily, state fuel tax revenues are dedicated to roads and bridges. For several reasons, however, fuel tax revenues are diminishing over time even as population growth increases the vehicle miles traveled. This means the state faces doing more with less as it enhances and maintains transportation infrastructure.

It is time for Georgia to consider a mileage-based road user fee, according to a new study, “The Promise of Per-Mile Charges for Georgia Transportation.” The joint study by Robert Poole, co-founder of Reason Foundation and Senior Fellow at the Georgia Public Policy Foundation, and Benita Dodd, vice president of the Georgia Public Policy Foundation, was unveiled November 15 at the State Capitol before the Georgia Commission on E-Commerce and Freight Infrastructure Funding. Commission members include the transportation committee chairmen of both legislative chambers as well as the commissioner of the Georgia Department of Transportation (GDOT).

“Fuel tax revenues have begun what is going to be a long, ongoing decline because of the change in fuel economy and the rise and growth of electric vehicles,” Poole said in testimony to the commission, “so we’re going to need to replace the fuel tax as the primary source of highway funding.”

Today’s average gas mileage for vehicles is twice as high as it was in in 1975, “and 10 years from now you’ll probably go twice as far again,” Poole predicted. The Biden administration is expected to increase fuel-efficiency standards for new passenger vehicles; the federal Environmental Protection Agency is working on implementing mile-per-gallon standards for trucks.

At the same time, Poole emphasized, “Electric vehicle technology is coming fast – much faster than most of us have realized. It’s federal policy in a big way ….  It is worldwide policy; every single automaker and truck maker is producing electric vehicles. Some of the big auto companies in Europe and the United States have pledged that they’re going to stop producing internal-combustion engines within the next decade or so.”

Poole cited a recent Reason study projecting that electric vehicles (EVs) could comprise 50% of the U.S. light vehicle fleet by 2050, calling this “a realistic possibility” as the existing fleet ages out. Georgia is also making a concerted effort to attract more players in the electric-vehicle industry after a deal with SK Innovation to construct what is expected to make Georgia one of the world’s largest hubs of EV battery manufacturing.

After the Transportation Research Board concluded in the early 2000s that the fuel tax would not be viable long-term for the 21st century, a congressional infrastructure financing commission concluded that charging per-mile would be the most viable replacement. A big advantage, Poole said, was that it would “preserve the user-pay, user-benefits principle that has been so important in fuel taxes.”

A mileage-based user fee alliance created in the commission’s aftermath to encourage research and demonstration has 45 members in 12 states. Also, Congress has been funding state pilot projects for more than a decade, in which motorists voluntarily participate and report their mileage. Georgia is part of The Eastern Coalition, a partnership of 17 states and the District of Columbia, but the state does not yet participate in a pilot project.

Noting that the general public is still not sold on mileage-based user fees, Poole said “media hype” about privacy concerns is partly to blame, along with fears of “double taxation” and the tendency for some environmental groups to propose additional fees, including noise and emissions charges to the road user fee. In most projects,  privacy concerns have been eased by employing private contractors to collect the data.

Ultimately, Poole said, state agencies need to reassure motorists that funding is necessary for continual infrastructure improvement, and that the fee is an alternative, not an addition.

Almost universally, even the “large majorities that came in skeptical come out saying ‘Well, this looks like it’s a workable idea,’” Poole said. In the realm of workable ideas, mileage-based user fees are a no-brainer for Georgia.

View Poole’s testimony to the committee here: https://bit.ly/3czYws3.

Access the study, Driving Change: The Promise of Per-Mile Charges for Georgia Transportation,” at https://bit.ly/3HA0ZAW.


Chris Denson is Director of Policy and Research for the Georgia Public Policy Foundation and Benita Dodd is Vice President at the Foundation. Established in 1991, the Foundation is a trusted, independent resource for voters and elected officials. The Foundation provides actionable solutions to real-life problems by bringing people together. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (November 16, 2021) Permission to reprint in whole or in part is hereby granted, provided the authors and their affiliations are cited.