MIDLAND, Mich. — New research suggests potential benefits in charging taxes by the mile as opposed to charging taxes on gas.
The Mackinac Center for Public Policy says the state’s funding system could be enhanced if lawmakers adopt a “user fee system” that charges motorists based on miles driven, not on the number of gallons paid for at the pump.
The nonprofit says residents would be billed on mileage similarly to how they would be billed for utility payments.
Studies also show tax revenues decrease with time despite increases in gas taxes.
The research institute goes on to say that increased fuel efficiency would bring a deficit in gas tax revenue of $1 billion per year by 2050.
“It’s important to ‘future-proof’ Michigan’s highway revenue, making it independent of vehicle propulsion sources,” says Reason Foundation Director of Transportation Policy Robert Poole, who co-authored the study. “About a dozen other states have carried out pilot projects to test per-mile charges, and they have learned a lot about what works and what doesn’t work. Michigan can benefit from their experience by implementing a pilot project on per-mile charges in the near future.”
We’re told billing motorists by the mile would resolve a handful of other deficiencies brought on by the gas tax.
Read the report by the Mackinac Center for Public Policy here.
