A persistent concern voiced in conversations around mileage-based user fees (MBUFs) is that rural drivers would pay more under an MBUF model than they do under the current fuel tax structure. This concern likely stems from the fact that rural drivers tend to drive more than their urban counterparts. But would rural drivers actually pay more under an MBUF model?
To tackle this question, the Coalition (with the help of EBP US) conducted an analysis on the potential implications of an MBUF system on rural and urban households in several Eastern U.S. states. This work is part of the Coalition’s 2020 passenger vehicle pilot, which includes almost 400 participants driving an average of 900 miles per month. In our study, we have found that:
- Changes would be minimal for most households. Our preliminary findings show that if today’s state fuel tax were replaced by MBUF, annual vehicle fuel expenses would increase by $17 or decrease by $17 for most households. In other words, depending on where residents live and what type of vehicle they drive, a shift to MBUF is estimated to change household expenses by about $1.50 a month.
- How far vehicles can drive on a tank of fuel makes a difference. Households near urban areas tend to have more fuel-efficient vehicles than those in rural areas. This means urban households generally pay less fuel tax per mile driven than rural households in the current fuel tax funding model.
- If the fuel tax were replaced with a revenue neutral MBUF system, drivers in most rural areas would pay less than they do now.
Our main takeaways? In a mileage-based user fee system with a single per-mile rate, most rural drivers would pay slightly less than they do with current fuel tax structures, and all drivers—whether urban or rural—would see minimal changes in their fuel expenses each month.
