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RUC v DSRC


“Lee Armstrong is correct that part of the loss in revenues from fuel taxes is due to the lack of an inflation adjustment, but this is only half the battle”


2008 (it had been roughly flat since 1988, Figure 1) It is now approaching 25mpg en route to the 2016 corpo-


rate average fuel economy (CAFE) standard of 34.5mpg. The latest US standards call for corporate average fuel economy of 54.5mpg for cars and over 40mpg for trucks by 2025. This means the new vehicle fleet — internal combustion engines, alternative fuel vehicles, electric vehicles, plug-in hybrid vehicles and advanced hybrids with varied fuel sources — will consume as little as half the petrol and diesel consumed today, per mile. And, while CAFE standards currently end in 2025, history tells us they are likely to be extended with a similar rate of increase in the future. Alternative fuel vehicles further motive a transition to


RUC. Vehicles powered by electricity, natural gas, hydrogen and other fuels are emerging on the market today. Main- taining a fuel consumption-based tax system in light of the proliferation of such vehicles is both inequitable to taxpayers and risky to the revenues that maintain road infrastructure and fund other programs. Electric vehicles such as the Chevy Volt, Nissan Leaf, and Tesla S currently constitute less than 1 per cent of new sales, but the numbers are growing rapidly. The Tesla S now outsells Buick, Cadillac, Chrysler, Lincoln, and six other major brands in California (all of whom have


multiple models of vehicles). In June of this year, electrics and hybrids constituted nearly 9 per cent of new sales in California, a bellwether for the rest of the country. Moreo- ver, other alternative fuels, such as a CNG/LPG version of one of the best-selling vehicles in America, the Ford F150, are hitting the market within the year. Projections by various entities vary widely, but with alternative fuel vehicles poised to make a major leap in market share, now is the time to find and begin implementing an equitable way for these vehicles to pay for their usage of the roadway. If states wait 10 years to begin studying, testing, and implementing RUC programs, their road revenues will be depleted as the market quickly adopts alternative fuel and high-efficiency internal combus- tion engine vehicles.


3. Adjusting the fuel tax for inflation will not solve the current and future infrastructure funding problem Mr. Armstrong is correct that part of the loss in revenues from fuel taxes is due to the lack of an inflation adjustment. However, as discussed in point 2 above, this is only half the battle. Rapidly improving fuel efficiency is eating into fuel tax revenues at a comparable rate. Fuel taxes are consumption taxes. When consumption


Figure 1


Average sales-weighted mpg increased for first time in 20 years starting in 2008


Michael Sivak and Brandon Schoettle, University of Michigan Transportation Research Institute


North America Vol 8 No 3 thinkinghighways.com 23


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