Financial Evaluation of the CAFE Standards and Viability of a Mileage-Based User Fee as a Substitute for the Current per Gallon Fuel Taxes

The revenue impacts of the federal Corporate Average Fuel Economy (CAFE) standards/initiatives on transportation funding in Florida is discussed. The first step of the analysis is the forecast of the annual vehicle miles traveled (VMT), followed by development of a financial model to assess the impacts of CAFE standards in conjunction with the application of an MBUF (mileage-based user fee) as an alternative to the current TPG. The VMT forecasts display a moderate and reasonable annual growth rate of approximately 1.4 percent for 2011-2035. A financial model is developed to calculate the annual fuel revenues for the analysis period. For auto and light truck fuel efficiency, the financial model uses the dampened values of the CAFE standards for 2015 through 2025. The results of financial analysis and assessing the impacts of the CAFE standards clearly document the adverse effect of the federal energy and environmental policies/initiatives on transportation revenues and funding.