PA Considers Replacing Gas Tax With Mileage Fees

PENNSYLVANIA — Pennsylvania is one of 17 states considering replacing its gas taxes with a mileage fee.

The Eastern Transportation Coalition, a partnership of 17 states — including Pennsylvania — and the District of Columbia, said it's currently studying the feasibility of a mileage-based user fee as a sustainable alternative to the gas tax.

Under the program, a mileage counter would be placed on each vehicle instead of a gas tax. Fees would be assessed based on the number of miles traveled.

"Right now, most funding used to maintain our transportation system comes from a tax we pay on each gallon of fuel when we fill up at the pump," the coalition states on its website. "As fuel efficiency increases and more electric vehicles are on the road, the amount motorists pay to use our transportation system becomes more linked to the amount of fuel purchased versus the number of miles they drive. A mileage-based user fee model provides a different approach: pay for what you use."

In 2018, the coalition launched its first passenger vehicle pilot to start exploring mileage-based user fees as a potential alternative to the fuel tax. The organization said it is dedicated to advancing the national conversation around mileage-based user fees through education, and outreach.

According to the American Institute of Petroleum, Pennsylvania has the highest gas tax in the nation, at 77 cents per gallon. The state has increased gas taxes for the past eight years to help pay for bridge and road improvements.

Additionally, Pennsylvania Turnpike tolls have increased annually for more than a decade. This year, tolls increased by 6-percent for all E-ZPass rates system-wide. Turnpike Commission officials said the toll hike was needed to enable the commission to continue to maintain and operate its system for its 500,000 daily customers.

“The primary driver of the annual toll-rate increases continues to be our quarterly transit payments to PennDOT and the resulting debt service that comes along with the legislatively mandated funding obligation,” commission CEO Mark Compton said when the rate hike was announced in December.

“As a result, the Pennsylvania Turnpike has delivered almost $7 billion in funding to PennDOT in
the last decade, primarily to support mass-transit operations in Philadelphia and Pittsburgh.”