States like Hawaii, Utah, Virginia, and Oregon are exploring mileage-based user fees as a long-term, sustainable replacement for fuel taxes. Declining gas tax revenue, the improving fuel economy of vehicles, and the projected long-term growth in the use of electric vehicles underscore the need for a propulsion-agnostic funding source for roads and bridges.
However, mileage-based user fees face implementation challenges due to their expected increased collection costs compared to traditional fuel taxes. While administrative costs per vehicle will be high at the beginning of mileage-based user fee (MBUF) implementation, the collection costs should fall significantly as economies of scale are realized.
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