Transportation Funding

Many states use common funding sources to support transportation such as fuel taxes, state transportation funds, and vehicle-related fees or taxes. Some of these more traditional methods are no longer viable as vehicles become more fuel efficient or electric. AAMVA’s members have taken steps to create alternative funding and finance mechanisms to fund transportation such as mileage-based user fees, tolling, and other user-based fee structures. AAMVA works with the National Conference of State Legislatures (NCSL) to study the future of transportation funding and its impact on members.

As cars increase their fuel efficiency and as more electric vehicles become a driver’s primary option the fuel tax is becoming an increasingly unsustainable method to fund highways. Mileage-based user fees (MBUFs) are a per-mile fee levied on road users based on the distance driven. Under this system a user driving on a particular roadway pays a per-mile rate times the number of miles driven. This method of payment is on par with a household utility. The more a user drives the more they pay and every driver pays regardless of type of vehicle driven. Ultimately this may subsidize transportation funding and provide an alternative revenue source for jurisdictions.

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