A Model for Projecting Revenues from a State Vehicle Miles Traveled Fee

Texas Transportation Institute (TTI) researchers have developed a model for estimating the revenue generating potential of a fee based on Vehicle Miles Traveled (VMT). This model was developed in response to ongoing regarding the long term sufficiency of the fuel tax as the primary mechanism for funding transportation system development. The model developed by TTI researchers was constructed on several basic assumptions: (1) The relationship between population growth and VMT growth will continue in the long term; (2) Average vehicular fuel efficiency will continue to increase; (3) Current legislative apportionment of fuel tax revenues to non-transportation activities will continue. The revenue model shows that a 2.9 cents per mile fee, if applied to all commercial vehicle mileage and a 0.95 cents per mile fee applied to all personal vehicle mileage will generate the same amount of revenue in 2010 as the state gasoline and diesel taxes are expected to. The model also reveals that Texas state gasoline tax revenues are expected to peak in 2021 and then decline steadily, while revenues from a potential VMT-based fee will keep pace with population growth. The model allows for the input of several variables relating to fee structure and phase in strategy so as to allow for an analysis of revues under numerous potential implementation and administration policies.