Vehicle Registration-based “Access User Fee”

RTA supports the implementation of an “access user fee” as a simple, fair, and resilient method of replacing the motor fuels tax to modernize transportation funding.

The concept is this:

  • 1. Raise the annual EV fee (currently $140.25/year) to what the owner of the typical gasoline-powered vehicle pays in gas taxes over the course of a year (currently around $237/year)
  • 2. Charge all passenger vehicles the same rate – whether electric, gasoline, or hybrid;
  • 3. Allow vehicle owners to pay the access fee on a monthly, quarterly, or annual basis; and
  • 4. Eliminate all state gas taxes.

The fee would not initially apply to diesel vehicles, so current truck taxation methods would remain.

With an access fee, everyone would pay the same rate, regardless of the type of vehicle you drive, where you live, or month-to-month variation in travel. An access fee would be analogous to a typical monthly mobile phone bill, which does not vary regardless of minutes used.

Drivers who travel further for work and other activities would pay less in access fees than they do today in gas taxes. Transportation fees would be more predictable and stable, for both motorists and NCDOT, even if travel and fuel usage were to drop in a recession or pandemic.

Plus, the state won’t have to create a new revenue collection bureaucracy, and North Carolinians won’t have to track vehicle miles traveled.

An access user fee is just one idea to modernize our state’s transportation funding model, and RTA will support any modernized funding approach that is effective, resilient, and politically acceptable.

Background.  As the overall fleet of registered motor vehicles become increasingly more fuel efficient, with some vehicles now powered partially or completely by electricity, there are naturally increasing concerns about the continued viability of the motor fuels tax as a primary funding source for highway transportation.

A number of possible approaches to deal with this situation have been proposed across the nation, and NCDOT launched a “FIRST” Commission to specifically focus on the issue of new, sustainable highway funding sources at the state level. RTA supports the efforts of the FIRST commission, as well as the North Carolina Chamber’s Destination 2030 initiative, to identify possible solutions that will modernize and stabilize highway funding.

RTA position.  The regional business community is open to a variety of potential solutions. To move the conversation forward, RTA has offered comments in support of a vehicle registration-based “access user fee” approach, whereby users would pay a fee to access the state’s road network. Of course, we already do this today through our annual vehicle registration and drivers license fees.

Implementation of the access user fee proposal would simply involve an increase in our state’s existing vehicle registration fees and a simultaneous reduction or elimination of motor fuel taxes.

This would not be a new way of modernizing transportation funding in our state, as increased annual registration fees is what North Carolina already does a version of this today for electric vehicles in lieu of gas taxes. An access user fee approach would simply apply this approach to all registered vehicles in the state, with modernized and equitable pricing applied for all vehicles.

Learn more in these updated FAQs (May 18, 2021) and this RTA blog (May 20, 2021).

Implementation of an Access User Fee approach.  The increased registration fee could billed on an annual, quarterly, monthly, or even weekly basis — the latter being a potential option for collecting revenue from visitors to North Carolina, if we can detect their temporary vehicle presence here, similar to online tolling.

RTA also notes that, were an access fee-based approach in place today, NCDOT would not have experienced the severity of the coronavirus-induced revenue shortfall beginning in March 2020, since a significant reduction in travel would not have resulted in substantially decreased funding for transportation.

No matter what option or package of options we decide on as a state, it is clear that modernizing and stabilizing transportation funding in North Carolina must remain a high priority for commerce to be successful. The regional business community looks forward to helping advance solutions for our growing state.

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