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The Intersection of Urban Form and Mileage Fees: Findings from the Oregon Road User Fee Pilot Program

Posted by Content Coordinator on Friday, March 11th, 2011

MINETA TRANSPORTATION INSTITUTE

EXECUTIVE SUMMARY

In 2006 and 2007 the state of Oregon conducted a groundbreaking mileage fee pilot program. The program responded to a national concern that fuel taxes will stop serving as a reliable revenue source as a large proportion of the vehicle fleet transitions to running on little or no petroleum-based fuel. To prepare Oregon for this future threat to its transportation revenues, the state legislature authorized a pilot program to test mileage fees as a replacement for the state fuel tax.

THE STUDY DESIGN

This study examines the interactions between urban form and drivers’ responses to the Oregon mileage fee program, using data from 130 households  participating in the program. The analysis compares the program’s impact on vehicle miles traveled (VMT) in different locations and at different times for households charged with two different fee structures:

  • Peak-Charged households, who paid a fee of 10 cents per mile during peak hours in the region’s congested zone but a fee of only 0.43 cents per mile for all other mileage within Oregon.
  • Flat-Rate households, who paid a flat fee of 1.2 cents per mile for all mileage within Oregon.

POLICY IMPLICATIONS

The study results suggest various implications for transportation policymakers, including the following five:

1. Charging a noticeably higher fee for driving in congested conditions can successfully motivate households to reduce their VMT in those times and places where congestion is most a problem.

2. Households in all types of neighborhoods studied will likely reduce their peak-hour and overall travel under a mileage fee program that charges a high-rate for peak-hour travel, though households in higher-density neighborhoods with a mix of land uses will likely make greater reductions in VMT.

3. A mileage fee program that charges a high rate during the peak hour will likely strengthen the underlying influence of urban form on travel behavior, as compared to the current gas tax system. In other words, urban form patterns will affect travel behavior more than they currently do if the nation shifts to a new system of mileage charges that vary by congestion levels. For planners, this finding suggests that switching from fuel taxes to mileage taxes would strengthen the power of land-use planning as a policy tool to shift some travel from solo driving trips to more sustainable modes. Also, this finding about the link between urban form and travel behavior in response to a mileage fee implies that mileage-fee program designers will need to carefully consider both current and future urban form patterns when estimating the likely revenues collected from mileage fees and also the impact the fees could have on congestion levels.

4. The study findings suggest that residents in lower-density suburban areas, as well as residents in higher-density and more mixed-use neighborhoods, are able to reduce their driving in response to a mileage fee. Therefore, the results add new empirical evidence to the ongoing equity debate about whether mileage fees are unfair to households living in suburban communities, and suggest that this concern may not be warranted.

5. Although a peak-hour mileage charge could encourage drivers to think carefully about their travel decisions and they would probably reduce their VMT accordingly, the ultimate program outcomes will likely depend on the specific program design, especially when and how the mileage fee is paid. If the payment is made less frequently than the current system of gas taxes charged at the pump, such as through a monthly billing program, drivers might increase instead of decrease their VMT because they would be less aware of the cost of their travel.

Download full version (PDF): The Intersection of Urban Form and Mileage Fees

About Mineta Transportation Institute
www.transweb.sjsu.edu
The Mineta Transportation Institute (MTI) was established by Congress in 1991 as part of the Intermodal Surface Transportation Efficiency Act (ISTEA) and was reauthorized under TEA-21 and again under SAFETEA-LU. The Institute is funded by Congress through the US DOT’s Research and Innovative Technology Administration, by the California Legislature through the Department of Transportation (Caltrans), and by other public and private grants and donations, including the U.S. Department of Homeland Security…MTI conducts research, education, and information and technology transfer focusing on multi-modal surface transportation policy and management issues.”

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