Will the STSFA initiative revolutionise Road Usage Charging in the US?

The Surface Transportation System Funding Alternatives (STSFA) is a significant initiative by the United States federal government. Established as part of the Fixing America's Surface Transportation (FAST) Act of 2015. The initiative aims to research and pilot alternative funding mechanisms that can provide a sustainable and equitable source of revenue for infrastructure investment, and in the last few years it has secured further funding from the Biden administrations Infrastructure Investment and Jobs Act (IIJA).

What is the objective of the "STSFA"?

The core objective of STSFA is to develop and evaluate alternative funding mechanisms to replace or supplement the traditional fuel tax, which has been the primary source of revenue for road maintenance and development since its inception in 1932. However, fuel tax is a highly polarising political subject-matter, and as a consequence the tax rate was last raised in 1993 and has remained at 18.4 cents per gallon (for gasoline) ever since. Hence with inflation, the increasing fuel efficiency of vehicles and the growing adoption of electric vehicles, fuel tax alone is inadequate to maintain and build transportation infrastructure. One of the most promising alternatives being explored under STSFA is road usage charging (RUC), also known as vehicle miles travelled (VMT) fees.

Are there any examples of the impact of the STSFA?

The STSFA program is directly funding Road Usage Charge (RUC) pilots across several states in America. These pilots are testing the feasibility and effectiveness of RUC, with examples of the impact being seen in the following states:

Oregon has been a pioneer in exploring RUC. The state's OReGO program, launched in 2015 has received approximately $11M in funding. The program allows volunteers to pay a per-mile charge instead of the state fuel tax and uses various methods to track mileage, including GPS devices, non-GPS odometers, and smartphone apps. The success of OReGO has provided a model for other states to follow and highlighted the importance of flexibility in mileage tracking methods to address privacy concerns.

California has also conducted RUC pilot programs to assess different mileage reporting methods and their impact on drivers. The California Road Charge Pilot Program (which has received grants totalling $6.68M) tested various technologies and gathered feedback from participants to refine the implementation process.

Washington State's RUC pilot program has received $5.5M from the STSFA and has explored several approaches to mileage reporting, including manual odometer readings, plug-in devices, and smartphone apps. The program aimed to understand the preferences and concerns of drivers, providing valuable data to inform future RUC implementation.

In Hawaii STSFA grants played a crucial role in helping Hawaii develop and implement its Road Usage Charge (HiRUC) program. The Hawaii Department of Transportation (HDOT) received two STSFA grants totaling approximately $4.25 million to explore and pilot RUC, with the grants funding research, public outreach, and pilot testing to assess the feasibility and public acceptance of a mileage-based user fee as an alternative to traditional fuel taxes.

Other States like Minnesota and Missouri, and regional coalitions like the Western Road Usage Charge Consortium (RUC West) and the Eastern Transportation Coalition have also received STSFA funding to test and implement RUC systems​.

Challenges and Considerations

However, while RUC presents several advantages, its implementation is not without its challenges. Tracking vehicles to measure miles travelled raises questions about the invasion of privacy and the security security of the data collected. To gain public acceptance, it has to be demonstrated that the upsides far outweigh the necessity for tracking. RUC represents a significant shift from the traditional fuel tax, and it is already facing resistance from drivers and organisations in the commercial trucking sector who are accustomed to the current system.

Hence it's unsurprising that a lot of the grants awarded to US states have been used to investigate and understand how best such programs can be introduced in terms of the education and politics of its introduction, not just the operational aspects.

What does the future hold for RUC in North America?

The Surface Transportation System Funding Alternatives (STSFA) initiative represents a critical step towards addressing the funding challenges faced by the United States' transportation infrastructure and it is directly helping to pave the way for the introduction of RUC across America. Without it, individual states would be left without incentive and having to use state resources to experiment with new concepts like VMT.

As of now, Hawaii is the only state fully introducing a Road Usage Charge (RUC) system. HiRUC legislation, which is signed into law, will replace the state motor fuel taxes with a mileage-based road usage charge starting on July 1, 2025, for electric vehicles and the program plans to enroll all vehicles by 2033​. Without the STSFA initiative, this would not have been possible.