Road Usage Charge Feasibility and Business Case Assessment

Washington State Transportation Commission

Objective

Examine the feasibility of transitioning to a road usage charge, and then explore policy issues, evaluate the business case, and lay out a path to potential implementation.

Washington State’s Challenge

The gas tax, a primary source of funding for Washington State’s road network, will decrease in value over the long term as cars become more fuel-efficient and alternative fuel vehicles proliferate. Road usage charges are an alternative way for drivers to pay for the use and maintenance of the State’s road system, but the means to collect such charges are unfamiliar, are potentially difficult to implement, and may have difficulty achieving public acceptance.

Our Approach

To meet this challenge, Cambridge Systematics was hired by the Washington State Transportation Commission (WSTC) to lead a team to first assess the feasibility of road usage charging, and then evaluate the business case. We advised a steering committee about potential policy objectives and reported on the experience of road usage charging around the world. We then evaluated a wide range of illustrative high-level operational concepts – from simple to complex and asked the Steering Committee to decide if road usage charging was feasible – which they did. The next phase of work involved providing further policy and technical detail to evaluate financial and non-financial considerations of a business case.

Key Findings

In 2012, the Transportation Commission found that road usage charging was a feasible option for funding the transportation system in Washington State. In 2013, the Legislature directed the work to continue to determine if there was a business case to be made for road usage charging in Washington. The Transportation Commission found that a business case could be made for three potential road usage charge concepts or combinations of these concepts for ways to implement road usage charging:

  • Time Permit – A flat fee to drive a vehicle an unlimited number of miles for a given period of time (e.g., a month, a quarter, or a year);
  • Odometer Charge – A per-mile charge measured by periodic odometer readings; and
  • Automated Distance Charge – A per-mile charge measured by in-vehicle technology that can distinguish between in-state and out-of-state travel and periodic billing.

Financial considerations versus non-financial considerations diagram.
The business case evaluation presents financial and non-financial considerations, so that policy-makers can balance the two.

Some additional findings included:

  • Road usage charges will cost more to collect than the gas tax, but will have greater and more stable net revenue in 25 years;
  • Gas tax increases can raise more revenue in the short term, but will require frequent and regularly occurring increases;
  • In-vehicle devices raise privacy concerns, but these can be mitigated by allowing drivers to choose how they pay a road usage charge; and
  • A road usage charge system with choice ensures drivers would pay for the roads based on the amount of road use.

Next Steps

The Transportation Commission recommended that these investigations continue so that Washington will have future funding options. The next phase of work will refine road usage charge concepts to address policy, technical, and public acceptance issues. The Washington State Road Usage Charge Assessment Business Case Evaluation can be viewed here.