Proposing a National Pricing System: Delivering Transportation Sustainability through ITS

As the Highway Trust Fund, the federal government's primary source for financing U.S. highway, bridge and transit projects, continues to dwindle, the U.S. surface transportation system must address unprecedented challenges in rebuilding the nation’s infrastructure and managing increasingly congested roadways. According to the U.S. Department of Transportation, the Highway Trust Fund, which is primarily funded through federal gasoline tax receipts, collected $3 billion less in Fiscal Year 2008 than it did in Fiscal Year 2007, while federal transportation spending increased by $2 billion.

The gas tax, which has not been raised in over eight years, has steadily lost its ability to provide a sustainable revenue source for transportation, as Americans are reducing the miles they drive and buying more fuel efficient vehicles. According to U.S. Secretary of Transportation Mary Peters, “The fact that the trend persists even as gas prices are dropping confirms that America's travel habits are fundamentally changing. The way we finance America's transportation network must also change to address this new reality, because banking on the gas tax is no longer a sustainable option.”

At the 2008 ITS World Congress in New York City, a special session on congestion pricing and urban mobility highlighted the role intelligent transportation systems (ITS) applications could play in creating a new revenue system that redefines transportation funding policies and is not dependent on the amount of gasoline American drivers consume. This new system could pave the way for implementing technology that would address the other issues the surface transportation industry faces, such as congestion and mobility.

Referring to a “national pricing system,” speaker Ed Regan of Wilbur Smith Associates suggested a replacement to the gas tax that would be based upon the number of miles each person drove. This system would distribute the costs of maintaining the nation’s transportation infrastructure based upon the population’s usage of those facilities. Regan acknowledged that implementing a national pricing system would be complicated and therefore not as efficient in collecting funds as the current gas tax, but its long-term benefits and sustainability would ultimately outweigh these initial challenges.

In describing his vision of a national pricing system, Regan stated that every vehicle in the United Stated would be equipped with a device for fully automated electronic fee collection. This device could utilize GPS technology to ensure that motorists are only taxed on the miles they drive. While the front-end costs of installing the devices in every vehicle would require an initial investment by the federal government, these costs could be quickly recouped through the many services that the devices could provide. According to Regan, “this approach could provide the killer application that VII needs for its technology to reach every vehicle.” By establishing vehicle-to-vehicle and vehicle-to-roadside communication features, the Vehicle Integration Initiative (VII) promises to benefit U.S. motorists tremendously with enhanced safety applications and real-time information that will help reduce congestion. A challenge in making the initiative a reality has been how to ensure that every vehicle is equipped to transmit and receive these communications. Once the infrastructure is put in place for these types of communications, the public and private applications promise significant benefits, from real-time traffic and road condition reports to safety features that help reduce collisions.

Regan acknowledges that there are several issues that need to be addressed before a national pricing system could be put in place, such as privacy issues and collecting fees from users who do not use credit cards. However, these issues have been addressed successfully by other industries, as cell phone users can purchase anonymous, rechargeable calling cards. Other issues, such as enforcing the use of the system, could be addressed through ignition interlock systems that would ensure that the device is working each time the vehicle starts. While implementation of a national pricing system would require a significant shift in the way the nation’s surface transportation network is sustained, it also promises to revolutionize the services and information available to its users.