Improving the Efficiency and Equity of Highway Funding and Management: The Role of Vmt Charges

Abstract

Congestion problems that are becoming more serious, along with deteriorating roads and bridges, raise questions about the viability of the existing system for funding roads and highways in the United States. Using economic theory and evidence from the literature, this paper explores the role that vehicle mile charges could play in reforming highway funding and management. It discusses the advantages of such a system in comparison to the status quo as well as obstacles that might prevent the adoption or implementation of a system of charges for vehicle miles traveled. It also discusses options for addressing drivers' privacy concerns. Replacing fuel taxes with a comprehensive system of vehicle mile charges, especially if accompanied by a greater role for private firms in owning or managing roads, is a promising approach for achieving a more efficient and equitable solution for funding surface transportation infrastructure.