A New Era for Transportation Funding: Maryland’s Mileage-Based Fee Proposal
In a bid to address the declining revenue from fuel taxes, Maryland has proposed an innovative, albeit controversial, solution: a mileage-based user fee. This plan, currently under consideration in the state’s General Assembly, aims to introduce a highway-use fee that would charge drivers based on the number of miles they drive. The proposal, part of House Bill 1457 (HB1457), suggests that drivers could opt between a flat annual fee or a pay-as-you-go system based on their mileage. This approach is designed to ensure that all drivers contribute fairly to the maintenance and improvement of the state’s transportation infrastructure, regardless of their vehicle type or fuel efficiency.
How the Proposed Bill Works
Under HB1457, the highway-use fee would be calculated based on the average annual mileage of Maryland drivers, which is estimated at 11,245 miles per year. The fee would range from $5.83 to $182 annually, depending on the fuel efficiency of the vehicle. Drivers of older, less fuel-efficient vehicles would pay less, while owners of newer, more efficient cars, including electric vehicles (EVs), would pay more. The bill also aims to repeal the recently passed $125 annual surcharge for EV owners, replacing it with this new mileage-based system. Motorists would have the option to participate in a voluntary Mileage-Based User Fee (MBUF) program, which would allow them to pay based on their actual mileage rather than a flat fee.
Concerns and Criticisms: Privacy and Taxation
Despite its potential to create a more equitable transportation funding system, HB1457 has faced significant criticism. One of the primary concerns is privacy. Participants in the pilot program were required to track their mileage, either through odometer readings or GPS technology, raising questions about government surveillance. Senator Justin Ready, a vocal opponent of the bill, has expressed strong concerns about the state monitoring drivers’ mileage. "I don’t want the government knowing how far I’m driving," Ready said. "I don’t think that’s any of the government’s business." To address these concerns, Ready has sponsored a separate bill, SB557, which would prevent the state from implementing any vehicle-miles-traveled tax.
Another point of contention is the addition of yet another tax on top of the existing fuel tax. Senator Ready argues that Maryland has a tendency to "add taxes on top of other taxes," and this new fee would only exacerbate the problem. He believes the state should instead focus on addressing inefficiencies in its current transportation funding system, particularly the heavy subsidization of underutilized mass transit systems. "Over half of the Transportation Trust Fund goes to subsidize mass transit systems that nobody uses," Ready said. He suggests that transit fares should be adjusted to reflect their actual usage and costs, rather than relying on additional taxes.
A National Trend: Similar Programs in Other States
Maryland is not alone in exploring alternative transportation funding models. Virginia has already implemented a similar system, where drivers of vehicles with fuel economies exceeding 25 miles per gallon (mpg) pay an annual highway-use fee ranging from $6 to $128. This fee is in addition to standard registration fees. Four states currently offer voluntary mileage-based user fee programs, with around 30,000 drivers enrolled in Virginia’s program alone. Proponents of these systems argue that they promote fairness by ensuring that all drivers, regardless of their vehicle type, contribute to the maintenance of roads and highways.
The Broader Implications: A Step Toward Sustainable Funding
The push for a mileage-based user fee reflects a broader recognition that the traditional fuel tax, which has been the primary source of transportation funding for nearly a century, is no longer sustainable. As vehicles become more fuel-efficient and electric cars become more prevalent, the revenue generated from fuel taxes has steadily declined. This trend is expected to continue, making it essential for states to explore new funding models. Trish Hendren, executive director of the Eastern Transportation Coalition, explains that the proposed legislation is "a step towards a new way of funding transportation." Hendren acknowledges that the concept of a mileage-based user fee may be unfamiliar to many drivers, but she emphasizes that it is about fairness and ensuring that those who use the roads the most contribute accordingly.
The Road Ahead: Balancing Fairness and Privacy
As the debate over HB1457 continues, lawmakers must find a balance between creating a fair and sustainable transportation funding system and addressing the privacy concerns of drivers. While the proposed mileage-based user fee has the potential to address the shortcomings of the current fuel tax model, it also raises important questions about government oversight and the collection of personal data. Whether Maryland ultimately adopts this new system or explores alternative solutions, one thing is clear: the future of transportation funding will require innovative approaches that adapt to the changing needs of drivers and the environment. Only time will tell how this proposal fares in the General Assembly and whether it will set a precedent for other states to follow.
