Would a potential VMT user fee be in addition to the existing fuel taxes in Nevada?
No, a vehicle miles traveled (VMT) fee would not be in addition to existing fuel taxes. If enacted, a vehicle miles traveled fee would simply replace existing fuel taxes. This means that drivers would not be paying tax per gallon when they purchase the fuel at the pump, instead they would be charged a fee based on the distance traveled. For example, if you pay $2.50 per gallon today at the gas station, in a VMT system, you would pay about $1.96 per gallon at the gas station. But, you would be paying a VMT fee based on mileage to pay for the maintenance, operation and expansion of public roads and highways that provide us all with a safe, efficient and reliable transportation system.
Who is conducting this study?
This study is conducted by the Nevada Department of Transportation in collaboration with the University of Nevada, Reno and University of Nevada, Las Vegas.
Why do we need a user fee system?
The gas tax originally operated like a user fee. In Nevada, the gas tax was introduced in 1923 when nearly all vehicles achieved the same approximate gas mileage.
Prior to the 1970s, most vehicles achieved approximately ten miles per gallon. If a person drove more, they paid more for the additional burden placed on the road system. With the advent of more fuel-efficient vehicles beginning in 1975, things changed. Some drivers paid much less than others did for use of the roads. Vehicle fuel efficiency increased from an average of 11.8 miles per gallon in 1970 to nearly 20 today. Vehicle fuel efficiency will further increase to an average 37 miles per gallon by 2016.
While beneficial from an environmental and energy conservation perspective, and something the state wants to encourage and support, fuel-efficient vehicles alter the ability to fund the maintenance, preservation and modernization of our roads. Hence, a VMT user fee system would be equitable to all users and would help generate needed funds to continually provide a quality transportation system.
What would the rate be for the VMT user fee?
If a VMT fee were to become law, the legislature could determine a per-mile rate. The rate could be flat, treating everyone the same, or it could be varied to consider other state policies like environmental issues, time of day and congested roads, type of vehicles, or urban/rural issues. Options might include charging a lower rate-per-mile for vehicles that achieve a certain level of fuel efficiency, for motorists that avoid rush hour zones, or for those making other environmentally-friendly decisions.
It is possible that a VMT fee rate would not be much higher than the current fuel taxes paid on the gasoline and diesel.
I belong to a working family who travels to and from work/ business on a regular basis and sometimes I have to drive long distances for personal or business related trips. I am concerned that paying per mile will increase my transportation costs compared to what I am paying today in fuel taxes. Is that true?
Currently under the gasoline tax, you pay more in total fuel taxes and costs because you purchase more gasoline for traveling more miles. You would probably not be paying any higher than what you are paying today in fuel taxes on each gallon you purchase. A VMT fee would simply be a different way of paying the transportation taxes which will enable transportation agencies to collect for and fund a safe, reliable, efficient and sustainable roadway system.
Here is a simple example that explains the transportation costs based on fuel taxes and based on the proposed VMT fee.
- Let’s say you drive 40 miles every day to and from work/business and your car gets 20 miles per gallon. That means you will need 2 gallons of fuel every day. The average current fuel taxes that you pay today are about 54 cents per gallon irrespective of the fuel price (could be slightly different in different counties). Therefore, you are paying 54*2 = 108 cents or $1 and 8 cents in taxes for the 40-mile drive, which equals to about 2.7 cents per mile. So, if you drive more miles, you will be purchasing more fuel and paying more taxes. If you drive fewer miles, you will be purchasing less fuel and paying less in taxes.
- A VMT fee would be based on a similar concept. It would charge you based on the number of miles traveled. You will not be paying the 54 cents per gallon fuel taxes. Instead, you will be paying a VMT fee. If you pay $2.50 per gallon today, in the VMT program you will be paying about $1.96 per gallon plus any applicable VMT fee.
How will the VMT fee system work?
The VMT system could be linked to the vehicle odometer to calculate the number of miles you drive and will charge the fee accordingly.
Why are you exploring and considering the VMT User Fee?
The current federal and state fuel taxes were last increased in 1992. During the last 18 years, inflation has eroded the purchasing power of fuel taxes by approximately 52%. Whereas, during the same time, construction costs have gone up significantly, population has increased, the number of vehicles on our roads has increased and the number of vehicle miles traveled has increased significantly.
Since 2001-2002, the number of electric and hybrid vehicles has increased. These vehicles pay fewer, if any, fuel taxes for use of public roads, and hence the total fuel tax revenue has gone down. Also, the fuel efficiency of vehicles has improved. This means many modern vehicles now use less gas but continue to use the roads at the same or even higher frequency, causing more erosion of highway revenues.
This is why the state of Nevada is exploring a possible option to replace the gas tax with a VMT fee in the future to be able to continue to provide citizens a safe, reliable and comfortable road system. Our ability to pay for road repair, maintenance and construction is at risk when gas tax revenues decline.
What are the privacy implications of this study and will the data be shared with others?
No, the data would not be shared with any government or private agency for any other use except to collect the required vehicle miles-based fee. It would be solely used to calculate the vehicle miles-based fee for each vehicle. The privacy of the drivers would be protected.
Wouldn’t a mileage fee penalize people who drive fuel-efficient vehicles?
Mileage fees can be designed to reward and encourage the use of fuel-efficient vehicles. Studies show that all passenger vehicles do about the same amount of damage to the roads, leading to an assumption of paying fair share to operate, maintain and expand the current roadway system. However, vehicles do varying amount of damage to the environment such as air quality, etc. The environmental issues could be addressed through the legislative processes.
Why not simply raise the fuel tax on gasoline and diesel?
Simply raising the fuel tax on gasoline and diesel vehicles will not solve the problem and our roadway system will still need more revenue. This is because the number of electric and hybrid vehicles will continue to increase in the future and will continue to use the road system without paying, or paying limited, fuel taxes. Raising the fuel tax on the non-electric and non-hybrid vehicles alone will not be fair as electric and hybrid vehicles still impact roadways but do not contribute to fuel taxes it the same way. A "user pays" approach appears to be the most fair and equitable way to collect revenue for road repair, maintenance, and construction.
Would large commercial trucks be charged extra in the VMT fee system?
Commercial trucks will not be directly examined in the VMT fee study.
However, as a general statement, heavy commercial trucks cause more damage to the road surface than passenger cars and SUVs/personal trucks. VMT fee program technology would be capable of collecting a variety of data, including but not limited to the weight of the vehicle, the time of day, etc. Whether to charge the heavy trucks extra for use of the roads is a decision to be made by the legislature.
What is congestion pricing?
Congestion pricing is used to charge drivers a higher rate for driving in the rush hour or peak hour on selected highly-congested roads. The goal of congestion pricing is to discourage drivers from driving in the rush hours of the day and hence, lead to less congestion on the roadways. People can avoid the rush hour fee by changing their driving times a little or driving a different route. With a program like a Road User Fee, rates could be adjusted upward for vehicles traveling in these "rush hour" zones. The dollars raised from congestion pricing could be used to expand the capacity of the roads within the areas in which they were generated.
How would the device know how many miles had been driven in Nevada?
The VMT fee collection device would be pre-loaded with the Nevada boundary and would be capable of tracking the number of miles driven within Nevada.
Are other states conducting similar studies?
Yes. Oregon, Minnesota, and the U.S. Department of Transportation through the University of Iowa have been conducting similar studies. The University of Iowa is conducting the study in many cities in various states around the nation.
United States is not the only country investigating a vehicle miles based user fee system. Road user fee systems have been implemented in other areas such as London, Holland and Singapore.
Can I participate in the Pilot Study?
Yes. We will need volunteers to participate in the pilot study of this program. If you are interested, please provide us with your contact information by e-mailing vmtfeestudy@vmtfeenv.com and we will contact you as part of the participant selection process for the pilot study.
Where is this study being conducted?
This study is conducted both in the northern and southern Nevada, with rural areas also included in the pilot program volunteer selection process.
Does this study include a public involvement and participation process and how can I participate?
Yes. There have been workshops and public meetings conducted in northern and southern Nevada. Numerous informational items from these meetings can be found on the “Study Materials” page of this website.
For information on future Nevada Department of Transportation public meetings, please see our "Public Meetings" web page.
How do I submit my comments or suggestion about this study?
You can send your comments to the following email address: vmtfeestudy@vmtfeenv.com