Implementable Strategies for Shifting to Direct Usage-Based Charges for Transportation Funding (2009) / Chapter Skim
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Pages 74-92
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From page 74... ...
72 8. ANALYSIS OF MOST PROMISING VMT-FEE OPTIONS This chapter provides further analysis of the three VMT-fee options judged most promising for near-term implementation – mileage estimates based on fuel consumption, OBD II / cellular invehicle equipment, and coarse-resolution GPS in-vehicle equipment.
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73 (2009) have estimated an upper bound price of $50 per unit to manufacture and install a reasonably tamper-resistant AVI on existing vehicles; with approximately 250 million vehicles in the United States, this would entail a total cost of $12.5 billion.
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From page 76... ...
74 income tax payers each year, so the additional complexity of interacting directly with retail stations would seem to be well within their capabilities. However, one reason from moving fuel tax collection to the rack was to increase compliance, and some workshop participants expressed concern that moving the point of collection further "downstream" may increase the opportunities for tax evasion.
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75 • No charges levied. Policymakers may wish to create incentives to encourage more rapid adoption of alternative-fuel vehicles.
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76 operational experience that could guide the scaling and refinement of the central billing option, should the decision ultimately be made to apply this mechanism for all vehicles. Parallel charging mechanisms for foreign vehicles.
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77 Several caveats should be mentioned. First, the installation of DSRC-equipped gantries is not inexpensive (in addition to the RFID reader, the gantry must also include a sensor to detect that a vehicle is approaching; otherwise it would not be possible to flag vehicles that lack the needed AVI device)
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78 • Easily accommodates foreign users • Low user burden • Straightforward audit trail • Minimal privacy concerns Weaknesses • Core pricing flexibility is limited • Inaccurate mileage estimates • Not possible to accurately apportion revenue by jurisdiction • High cost to equip fuel stations with electronic readers • Share of vehicles requiring parallel payment mechanism increases over time Uncertainties • Cost and configuration of AVI device • Cost of equipping fuel stations with electronic readers • Cost of modifying fuel tax collection system to interact with retail fuel stations • Compliance with tax remissions Planning and Design Issues • State vs. federal roles in revenue collection • Payment mechanism for alternative-fuel vehicles • Whether to augment metering capabilities with DSRC tolling 8.2.
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79 Cost. There are several important cost components for this option.
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From page 82... ...
80 significant share – about $18 million per year – of the estimated operational costs were based on the assumption that paper bills would be generated and sent to motorists on a monthly basis. As electronic billing systems become more widespread, this cost component would likely decrease considerably.
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81 miles recorded. There are several approaches, depending on the adopted mechanism for transmitting mileage data.
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82 make a compelling policy argument for this choice (ease of administration aside)
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83 with mileage metering devices and those without. The former would have mileage fees added to the fuel purchase and fuel taxes subtracted, while the latter – including foreign vehicles – would simply pay fuel taxes.
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84 Privacy concerns. This approach would allow mileage metering by time of travel and by area or jurisdiction.
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85 • Comparatively low in-vehicle installation costs • Percentage of vehicles requiring parallel payment mechanism declines over time • Can support longer-term sustainable revenue system; no transition required Weaknesses • Use of cellular to meter location unproven in road pricing applications • Higher costs for in-vehicle equipment • Potentially higher administrative cost if central billing agency used to collect fees • Difficult to charge foreign users unless pay-at-the-pump collection model employed • Enforcement more difficult, perhaps more costly • Potentially higher user burden depending on enforcement strategies • Greater privacy concerns given cellular metering of location Uncertainties • Practical feasibility of metering location via cellular service • Cost of in-vehicle equipment manufactured at scale • Ongoing cost of cellular service • Costs associated with pay-at-the-pump system, if implemented • Costs associated with central billing agency system • Costs associated with debit card payment option • Cost and effectiveness of alternate enforcement options • Whether cellular location will raise privacy concerns comparable to GPS • How to enable billing audits while protecting privacy Planning and Design Issues • Strategy for procuring technology (see next chapter) • Method(s)
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86 8.3. Coarse-Resolution GPS Option Core Metering Capabilities.
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87 again be relevant here. If current fuel taxes were left in place, foreign vehicles would simply pay the fuel taxes when refueling.
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From page 90... ...
88 • Addition of gantries enables additional forms of pricing • Allows for accurate apportionment of fees by jurisdiction • Potential ongoing cost savings if cellular service not required • Accommodates all vehicle types; no parallel payment mechanism required • Can support longer-term sustainable revenue system; no transition required Weaknesses • Likely the highest costs for in-vehicle equipment • Likely the highest costs for equipment installation • Potentially higher administrative cost if central billing agency used to collect fees • Difficult to charge foreign users unless pay-at-the-pump collection model employed • Enforcement more difficult, perhaps more costly • Potentially higher user burden depending on enforcement strategies • Highest level of privacy concerns Uncertainties • Cost of in-vehicle equipment manufactured at scale • Cost implications if GPS becomes standard vehicle equipment • Costs associated with pay-at-the-pump system, if implemented • Costs associated with central billing agency system • Costs associated with debit card payment option • Cost and effectiveness of alternate enforcement options • Whether privacy concerns associated with GPS can be overcome • How to enable billing audits while protecting privacy Key planning decisions • Strategy for procuring technology (see next chapter) • Method(s)
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From page 91... ...
89 8.4. Shared Obstacles Despite their promise, the three VMT fee options discussed in this chapter share several important limitations to consider – most notably increased cost and administrative complexity.
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From page 92... ...
90 comparison to passenger vehicles, trucks would face higher per-mile fees based on their weight, and they travel many more miles each year. Thus the cost of the in-vehicle equipment could be amortized much more quickly.
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