For decades, motor fuel taxes were used to maintain infrastructure and improve the experience of transportation users. With cars becoming more fuel efficient — and more people switching to electric and hybrid vehicles — revenue from motor fuel taxes isn't keeping pace with infrastructure costs. Illinois and other states have been at a crossroads over how to fully fund the transportation system in recent years.
As part of our mobility recovery work, the Chicago Metropolitan Agency for Planning (CMAP) is examining ways to reimagine the regional transportation system and find sustainable funding to better serve all residents. Northeastern Illinois likely will need more than $30 billion beyond existing revenue sources to maintain and improve the transit system through 2050. Roads and bridges will require additional investments to meet the region’s goals for condition.
ON TO 2050, the long-range plan for northeastern Illinois, recommended replacing the motor fuel tax with a road usage charge as a more reliable alternative in the long term. The region already has seen progress on this issue after motor fuel taxes were increased and tied to inflation under the Rebuild Illinois capital program.
Under a road usage charge, people pay based on how many miles they drive. The idea is gaining momentum nationally. The newly signed $1.2 trillion federal infrastructure bill includes $125 million to fund road-usage-charge pilot programs, including the first national pilot.
Oregon has been one of the few states in the country to implement a road usage charge, providing a glimpse of how the idea could work on a statewide level.
Concerned about declining motor fuel tax revenue, the Oregon legislature started looking at other ways to fund transportation in 2001 and moved forward with testing a road usage charge. After two successful pilot programs in 2006 and 2012, the state introduced OReGO, a pay-per-mile program for personal vehicles in 2015.
Volunteers who enroll in OReGO install a device in their car that tracks mileage and pay 1.8 cents for every mile they drive. For example, a 10-mile trip would cost 18 cents. They receive a credit for state fuel taxes, and those with electric or fuel-efficient vehicles are not required to pay a surcharge on their annual vehicle registration fees. Through the first quarter of 2021, more than 2,000 vehicles were in the program.
The program has proven popular. In a 2016 public opinion survey, most Oregonians said a road usage charge is a fairer way of funding transportation than other traditional means, such as implementing a vehicle sales tax or increasing vehicle registration fees and motor fuel taxes.
In Oregon and elsewhere, a road usage charge has generated revenue for improvements while ensuring electric vehicles and high fuel efficiency vehicles — which still add wear and tear —contribute to maintaining and enhancing the system. Insights from Oregon can help guide northeastern Illinois as the region considers how this type of charge could fit within broader transportation funding.
CMAP is working with regional leaders on mobility strategies for an equitable recovery from the COVID-19 pandemic. As we develop recommendations, CMAP will periodically share insights on innovative policy ideas or best practices that can ease congestion, sustain transit, and increase resiliency in northeastern Illinois.