By Joseph Palmersheim 
                          As vehicles get more fuel efficient, a yet-to-be answered  question remains: how will this impact funding for Minnesota roads? 
                          MnDOT staff will participate in an upcoming “Rethinking  Transportation Finance Roundtable: Transition to Distance-Based Fees”  event from 3:30–5 p.m. Monday, June 14. This event, the third in a series by  the Humphrey School’s State and Local Policy Program, focuses on familiarizing  state transportation and policy leaders with distance-based user fees and  user-based transportation funding alternatives. 
                          MnDOT Commissioner Margaret Anderson Kelliher will provide  opening remarks, and MnDOT road  pricing program director, will moderate a roundtable discussion on  Minnesota’s Distance-Based Fee demonstration project and Minnesota legislative  perspectives on a future transition to a new system of road usage charges. 
                          So what is a DBF? Buckeye describes it as a fee levied on  drivers for each mile of travel on public roads.  In essence, the DBF is intended to recover  some of the revenue that is not being collected from the motor fuel tax due to  increasingly fuel efficient vehicles.   
                          Minnesota, like most states, relies heavily on the gas tax  to build and maintain roads and bridges. While the gas tax continues to be a  significant source of highway revenue, today’s vehicles are using less gas and are  increasingly reliant on other energy sources like electricity. In effect, the  public is driving more but paying less for gasoline and, consequently, less in  gas taxes to sustain sufficient levels of highway funding. This trend is  expected to continue and eventually accelerate. 
                          One of the big issues with DBF deployments is the cost of  collection, Buckeye said. In both Oregon and Utah, the only two states with  DBFs, the cost of operating their road user charge system exceeds the revenue  collected. The presumption is that would change with economies of scale, but it  is not clear how much. 
                          Minnesota’s DBF demonstration is an attempt to show how  embedded telematics might be used to enhance the efficiency of fee collection. The  project collected data between April 2020 and March 2021 from two car-share  companies in Minneapolis and St. Paul, along with data from a simulation using  an automated vehicle supplied by VSI Labs in St. Louis Park. Final analysis and  final report preparation is underway. 
                          Embedded telematics, the hardware capable of collecting and  transmitting data, is built into the vehicles used in the test. It cannot be  removed, altered or corrupted by the user (at least in theory, Buckeye  noted). That was a significant component of the demonstration, because  almost all other demonstrations used “add-on” technology, which is vulnerable  to manipulation, and therefore fraud or fee avoidance. 
            “We focused on the car-sharing business because their  embedded telematics most closely represented what we believe will be available  in the future on all new vehicles,” Buckeye said. “Importantly, we also believe  use of the embedded telematics for data collection will enhance efficiency of  operations while meeting data security and privacy demands. The car-share  telematics system enables a user to reserve a car via a smartphone app, and  then open the vehicle when the user chooses. Beyond that, the reporting of  mileage is sent back via cellular communications to the central server in order  to appropriately charge the user. This makes it very convenient for the user,  and the government never sees the personal trip data because it is aggregated  for reporting.” 
                          The DBF demonstration in Minnesota is an attempt to show how  the “user-pays” principle, used in the motor fuel tax,  might be deployed fairly on the new generation of vehicles that use less motor  fuels, Buckeye said. 
            “A mileage- or distance-based fee is one potential way to  close the highway funding gap and ensure everyone is paying their fair share,”  Buckeye explained. “This is an enormously challenging problem that states are  facing. The federal government has provided financial incentives through the  FAST Act for states to study and demonstrate alternatives to the gas tax. This  DBF Roundtable is an attempt to bring together experts to discuss the pros and  cons of various approaches and ideas.” 
            Learn more about Distance-Based Fees 
  
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