Network Access Fee-Based Highway Funding

As the overall fleet of registered motor vehicles become increasingly more fuel efficient, with some vehicles now powered partially or completely by electricity, there are naturally increasing concerns about the continued viability of the motor fuels tax as a primary funding source for highway transportation.

A number of possible approaches to deal with this situation have been proposed across the nation, and NCDOT has launched a “FIRST” Commission to specifically focus on the issue of new, sustainable highway funding sources at the state level. RTA supports the efforts of the FIRST commission, as well as the North Carolina Chamber’s Destination 2030 initiative, to identify possible solutions that will modernize and stabilize highway funding.

The regional business community is open to a variety of potential solutions, and it is increasingly clear that multiple options will need to be considered and implemented. To move the conversation forward, RTA has offered comments in support of a network “access fee-based” approach, whereby users would pay a fee to access the state’s road network. Of course, we already do this today through our annual vehicle registration and drivers license fees.

Implementation of the access fee-based proposal would simply involve an increase in our state’s existing vehicle registration fees and a simultaneous reduction or elimination of motor fuel taxes. This would not be a new way of modernizing transportation funding in our state, as increased annual registration fees is what North Carolina already does today for electric vehicles in lieu of gas taxes. An access fee-based approach would apply this to all registered vehicles in the state.

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The increased registration fee could billed on an annual, quarterly, monthly, or even weekly basis — the latter being a particularly promising option for collecting revenue from visitors to North Carolina, if we can detect their temporary vehicle presence here, similar to online tolling.

An access fee-based approach — whether through increased vehicle registration fees, drivers license fees, a combination, or other options – can help address increasing demands for resources amidst ongoing volatility and increasing obsolescence and unfairness of the motor fuel tax due to the difference in fuel efficiency across the fleet.

RTA also notes that, were an access fee-based approach in place today, NCDOT would not have experienced the severity of the coronavirus-induced revenue shortfall beginning in March 2020, since a significant reduction in travel would not have resulted in substantially decreased funding for transportation.

No matter what option or package of options we decide on as a state, it is clear that modernizing and stabilizing transportation funding in North Carolina must remain a high priority for commerce to be successful. The regional business community looks forward to helping advance solutions for our growing state.

Resources

NCDOT financial and performance update – delivered to RTA on May 8, 2020

RTA access-based approach policy brief – draft revised June 5, 2019

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