• June 27th, 2022
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Mileage-Based User Fees (MBUF) are one of several alternative revenue sources being considered under PennDOT Pathways – a program to identify, evaluate and implement future-focused funding for Pennsylvania's extensive transportation network. Also known as a Road User Charge or Road User Fee, this approach charges motorists according to how much they use roads, not by taxing how much fuel they purchase.

According to Governor Wolf's Transportation Revenue Options Commission (TROC) report in July 2021, 78% of PennDOT funding in 2021-22 came from federal and state fuel taxes. However, as increased use of more fuel-efficient and electric vehicles makes fuel taxes an unsustainable source of revenue, the agency is facing an annual shortage of billions of dollars. While vehicle electrification will generate environmental benefits and quality of life improvements, the related impacts on funding cannot be ignored in a state that relies heavily on a declining revenue source.

What is MBUF? Drivers pay either a flat road use fee or a per-mile fee. Paying by the mile, of course, requires a system for recording miles driven, like a manual approach where drivers enter their miles into an app or record the information during their vehicle inspection, while other methods include using technology that drivers can plug into a port in their vehicle. Drivers can also choose between GPS-based and non-GPS-based versions. And though these types of devices have made it easier to record and report miles driven, some motorists may be concerned about privacy if required to install them, so providing drivers a choice can be key to increasing public acceptance, as can strong data protection practices.

According to research by The Eastern Transportation Coalition (TETC), once drivers use plug-in MBUF technology, their privacy concerns tend to lessen significantly. The coalition gave devices to rural, suburban and urban drivers in Pennsylvania, Delaware, New Jersey, and North Carolina, to determine how many miles they drive and what a milage fee might charge them. The study found drivers became more comfortable with the device the longer they used it. But MBUF can also work without relying on MBUF-device technology, as well, particularly in states like Pennsylvania that still have a vehicle inspection program that records mileage on an annual basis.

The concept is not new. For example, a voluntary MBUF program has existed in Oregon since 2015 and Utah since 2018. Based on TETC data, MBUF could also provide an added benefit for rural drivers in Pennsylvania who could potentially save $34 a year on average using an MBUF per-mile rate. See TETC's report on its MBUF pilot program for more information on its findings.