Road user charges could top-up dwindling transport funding

aPriL- MaY 2022 Road user charges could top-up dwindling transport funding

With vehicles becoming more fuel efficient and EVs gaining prominence, mileage-based user fee programmes are being adopted overseas to make up for lost revenue in fuel taxes

The US state of Virginia has signed a contract with tollbased mobility solutions provider Emovis to implement a mileage-based user fee programme for an initial period of three years.

It joins Oregon, Utah, and Washington that have previously rolled out the solution.

According to Emovis, its mileage-based user fee programme can help compensate for the loss of fuel tax revenue resulting from the increase in electric and more fuel-efficient vehicles.

It is designed to be an equitable way to ensure all vehicle owners pay their fair share of tax.

Eligible vehicle owners will be given a choice during the annual vehicle registration process to pay a flat fee or opt for a pay-permile charge, capped at the equivalent of the annual flat fee.

The solution to be implemented in Virginia is based on the current Utah solution. Client authority the Virginia Department of Motor Vehicles says up to 1.9 million vehicles will be eligible for the Virginia programme, which is expected to launch in July.

Emovis says it shows a clear commitment toward mileage-based user fees in the country as an alternative for future funding and improved performance of the US transportation system.

New Zealand’s policy on EVs

Technically EVs are already subject to road user charges because they don’t use petrol, but are temporarily exempt from paying, the Ministry of Transport says.

“The Government’s long term view is that all road users should pay for their use of the roads. A temporary exemption from road user charges provides an incentive for people to purchase an EV.”

The exemption is currently due to expire on 31 March 2024.

The prospect of scrapping fuel taxes altogether and introducing road user charges for all vehicles has been discussed and has seen bi-partisan support in the past, but there is no indication this will happen any time soon.