Consideration of a Vehicle Miles Traveled Tax in Michigan

Abstract

Gasoline tax revenue is becoming increasingly insufficient to fund road repairs and maintenance nationwide due to the increased fuel efficiency of gasoline-powered vehicles, increased sales of electric and hybrid alternatives, and overall construction cost inflation. Michigan’s solution to this problem, until now, has been to continually increase existing fuel taxes, which does little to address the aforementioned issues. Alternative policy options to supplement and eventually replace these traditional taxes include bridge and highway tolls, higher licensing and registration fees, and the Vehicle Miles Traveled (VMT). Several states in various stages of VMT tax implementation are examined through the lens of public policy and administration topics, and considerations unique to Michigan are addressed. Any final VMT tax policy proposal must acknowledge constituent privacy and security concerns while achieving equitable administration