Mn/DOT assessing potential for mileage-based user fee to replace fuel tax; Battelle conducting technology assessment

The Minnesota Department of Transportation (Mn/DOT) will recruit 500 people from Wright and Hennepin counties to take part in research to test technology that could someday be used to collect a mileage-based user fee (MBUF) in lieu of a gasoline tax. Mn/DOT will start recruiting volunteers for the Minnesota Road Fee Test in May and research will begin in July 2011.

Minnesota’s highway revenues are derived from three sources: the gas tax, vehicle registration fee or tabs and the motor vehicle sales tax. These funding sources support construction and maintenance of the highway system. Based on its last state transportation plan, Mn/DOT anticipates as much as a $50-billion transportation funding shortfall during the next 20 years.

Other state DOTs also are researching alternative financing methods to supplement or replace a gas tax. The state of Oregon conducted a similar study completed in November 2007 and Iowa, Nevada and Texas are among several states currently researching mileage-based user fees.

This research will provide important feedback from motorists about the effectiveness of using technology in a car or truck to gather mileage information. We are researching alternative financing methods today that could be used 10 or 20 years from now when the number of fuel efficient and hybrid cars increase and no longer produce enough revenue from a gas tax to build and repair roads.

—Cory Johnson, project manager

In 2007 the Minnesota Legislature appropriated $5 million from the trunk highway fund for the demonstration. An adequate evaluation of MBUF technology must include a parallel policy evaluation, so Mn/DOT awarded a $395,000 contract to the University of Minnesota Humphrey School to conduct the policy study.

For the technology component of the Mn/DOT work, Battelle will conduct a $4.1-million project that will use commercial off-the-shelf technology to determine the feasibility of a mileage-based user fee.

Battelle’s Transportation group will conduct the project as part of the National Connected Vehicle Program, a Federal Department of Transportation initiative to use technology to improve safety, mobility, and information sharing between vehicles and roadside equipment.

Minnesota’s Road Fee Test project will be another in a series of technology demonstrations that are being conducted as a part of this federal program. The Battelle project will include designing, building and testing new software applications that will run on cellular smart phones that utilize global positioning system (GPS) to determine location, heading, speed, etc. The GPS display may be mounted on the dashboard of any vehicle.

If the project goes as planned, the state of Minnesota will demonstrate that a commercially available device can be used to collect a miles-based user fee, and that these devices also can provide benefits for both drivers and others who interact with them.

—Ben Pierce, Battelle’s Project Manager

The volunteers will use a Smart Phone with a GPS application that also has been programmed to allow motorists to submit information, which Mn/DOT will use to evaluate whether the device provides timely, reliable travel data from that specific trip.

In addition, the test will examine whether other applications, such as real-time traffic alerts that provide information on construction zones, crashes, congestion and road hazards, are effective in communicating safety messages to motorists. Three different groups of volunteers will test the devices for six months each. The volunteers will be paid a nominal stipend to cover the expenses of this test.

The technical research is designed to record miles and road use while strictly protecting the privacy of participants. The participants’ names and home contact information, as well as the data that identifies their vehicle, financial account information, travel routes, and days and times of trips, are classified as not public by the Minnesota Department of Administration to ensure that the research and results are valid.

Mn/DOT has established a policy task force to examine implications of implementing a mileage-based user fee. The task force, to be chaired by former state representative Bernie Lieder, will hold meetings throughout the state and survey Minnesotans about concerns that should be addressed before such a fee could be implemented.

The Mn/DOT research is scheduled to end by December 2012 and results will be made available to the public at

Previous MBUF research in Minnesota:

  • In June and July 2009, Mn/DOT conducted 821 phone-mail-phone interviews with Minnesota drivers selected by random sample augmented by drivers of hybrid vehicles to better understand their understanding of funding of transportation issues.

  • In August 2008, Mn/DOT conducted nine mini-focus groups (five in the Twin Cities Metro area and two each in Duluth and Mankato) with Minnesota drivers to understand the perceptions and level of acceptance among the Minnesota public about implementation of a mileage-based user fee.

  • In May and June 2007, Mn/DOT conducted qualitative research to understand public opinion about a mileage-based user fee alternative to the current motor fuel tax. People interviewed included knowledgeable transportation experts as well as the general public. Eight transportation experts participated in an online bulletin board discussion about the issue and 10 focus groups (six in the Twin Cities Metro area and two each in Duluth and Mankato) totaling 89 people provided feedback.

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