Member Briefing: May 21, 2021
- May 21, 2021
- Posted by: Joe Milazzo II
- Category: Member briefing
About three months ago, we focused our weekly member briefing on modernizing state highway funding. While there has been some positive movement, the issue still remains unresolved, and as a result, we are devoting this week’s briefing to this high priority focus area for RTA.
RTA continues to elevate the potential of a vehicle registration-based “access user fee” for cars and light trucks as a simpler, fairer opportunity to modernize highway funding in North Carolina.
As we noted in this week’s blog, fuel taxes are increasingly unfair — the less fuel efficient your vehicle is, the more you end up subsidizing the travel of others. In addition, fuel taxes are increasingly unable to provide sufficient funding for transportation in our growing state as electrification and overall fuel efficiency increases.
Currently North Carolina has an annual electric vehicle fee in lieu of fuel taxes — in other words, an access fee — of about $140. Unfortunately, that fee is only equivalent to about 60% of the annual fuel tax paid by the average North Carolina driver ($237), which means electric vehicles owners receive an effective annual user fee subsidy of around $100.
Implementation of the access user fee concept for all vehicles is straightforward. North Carolina would simply raise the electric vehicle fee to align with what the average driver pays in fuel taxes … and then charge all vehicles that same “access fee” amount, on an annual or monthly basis, while simultaneously eliminating state fuel taxes.
Access user fees have a number of benefits, including equity, predictability, resiliency, adaptability, and scalability. In addition, there are several plausible work arounds for out-of-state travelers. See this week’s blog for more details.
While an “access user fee” is a different approach than a “travel user fee” framework such as fuel taxes and “VMT” fees, it is consistent with actual costs to the state, and value for the user.
To be clear, the access fee does not consider congestion, and the resulting additional roadway width needed to service additional vehicles. However, neither does a basic travel-based fee (like a fuel tax or an odometer-based VMT fee), at least directly. The access fee prioritizes simplicity, fairness, and resiliency. A robust travel-based user fee that adequately accounts for miles driven in congestion will require addressing a number of data collection, security, and privacy costs or concerns.
The regional business community believes that a vehicle registration-based “access” user fee for cars and light trucks could serve as an important component of an approach to modernize the highway revenue business model for North Carolina — and inspire other ideas that might could involve a fixed amount (e.g. access fee) and/or a variable component (e.g. travel-based).
RTA is pleased to be a part of the NC Chamber’s Destination 2030 initiative that is focused on modernizing state highway funding; the access user fee-based approach is included in this effort. The concept is also a natural extension of several of the options mentioned by the NCDOT FIRST Commission. We will continue to elevate the potential for an access user fee approach as part of a future solution package — while remaining open to any and all options that will be fair, sustainable, and acceptable.
Let’s get moving,
Joe Milazzo II, PE
RTA Executive Director