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Modernizing transportation revenue collection with a road usage charge

By keeping people and goods moving, our transportation system supports the economic vitality and quality of life of northeastern Illinois. But the region has fallen behind in making critical transportation infrastructure investments to maintain and modernize the system. Traditional transportation revenue sources are growing slower than the cost of operating and maintaining the system. As a result, the draft ON TO 2050 plan estimates that the cost of operating and maintaining the transportation system in today’s less than optimal condition will exceed the funds expected to be available under the revenue sources we use today. If the state and region fail to address the imbalance between funding needed and revenues available, the condition of our roads, bridges, and transit system will decline.

The funds available today are not even sufficient for maintaining our current infrastructure. To simply operate and maintain the system, as well as to modernize and improve its condition, the state and the region must pursue additional revenues. To carry out the plan’s transportation recommendations, ON TO 2050’s financial plan proposes five new revenue sources for federal, state, and local lawmakers to pursue, including in the short-term increasing the state motor fuel tax (MFT) to at least make up for the cost of inflation since it was last raised nearly three decades ago. Ultimately, the MFT should be replaced with a road usage charge (RUC), sometimes called a vehicle miles traveled (VMT) fee. While this replacement is a long-term transition, the State of Illinois should begin a pilot program in the short term to demonstrate the viability of this new revenue source and consider issues related to fairness and privacy. This analysis explores this ON TO 2050 recommendation, discussing how a RUC could work, policy considerations, and implementation efforts in other states.

This analysis is one of a series examining transportation funding in northeastern Illinois and explaining the revenue recommendations included in ON TO 2050. This analysis highlights opportunities to use tolling and value capture to fund transportation improvements. Other analyses in the series examine existing revenue sources for the regional transportation system, and explain recommendations including using tolling and value capture to fund transportation improvements, expanding the sales tax base, expanding parking pricing, and implementing a federal cost of freight service fee.