A New Way to Fund Transportation

University of Minnesota Professor Max Donath and his colleagues at the Intelligent Transportation Systems (ITS) Institute have developed a promising new approach for charging fees for road use based on vehicle-miles traveled (VMT). Three national commissions with bipartisan membership have recommended that the U.S. move to a mileage-based system for funding transportation in the future to replace the gas tax. There is an increasing view among policy leaders that the U.S. would be better off with this type of funding system in the long-run, but not much agreement about how to get there given the technological and political obstacles.

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GPS technology has been used successfully with trucks in Germany to assess distance-based charges to pay for transportation infrastructure, but extending this approach to all vehicles could be quite costly and would be difficult to implement broadly in the near term.

Donath proposes a system which could be implemented in the near-term using widely available technology. The approach takes advantage of the OBD-II data link connector, which is in every passenger car built in the U.S. since 1996, and omnipresent cellular phone tower infrastructure.

The full report is available on the web: Technology Enabling Near-Term Nationwide Implementation of Distance Based Road User Fees. There is an excellent summary of the system by Peter Samuel in Toll Roads News.

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Hubert H. Humphrey Institute of Public Affairs