Mileage fees could strengthen the effect of land use policies on travel

The Mineta Transportation Institute recently released a report with some fascinating findings on how land use patterns and mileage fees are mutually supportive.  The results aren’t terribly surprising when you think about it, but provide some interesting nuance to the transportation-land use interaction.

The report is based on findings from the Oregon’s exploration of mileage fees, called the Oregon Road User Fee Pilot Program.  In this program, participants paid a per-mile fee rather than the state gas tax.  Half of the participants paid a per-mile fee that increased during rush hour in congested areas, while the other half paid a flat amount per mile at all times.

The Oregon program, along with many other recent forays into alternative funding mechanisms for transportation, is a response to the fact that the gas tax is becoming less and less dependable as a funding source for transportation because it hasn’t risen in decades, VMT has peaked and vehicles are becoming more fuel efficient.  Mileage (or user) fees are one way to bring the costs of building and maintaining the system back in line with revenue from actual users.

More on the results below the break.

Traditional Neighborhoods More Responsive To Fees

Unsurprisingly, one of the findings is that mileage fees that are higher during rush hour can motivate drivers to reduce mileage at times and in places where congestion is the biggest problem.  This is pretty much the whole theory behind congestion charging, if you force users to pay for the negative externality they create (congestion), they will do it less.

A more interesting finding is that traditional neighborhoods – denser places with access to transit and a mix of housing, jobs and services – show a greater mileage reduction in response to the fees than low-density suburban communities.  This finding suggests some land use patterns are “more supportive of mileage fees than others” (supportive meaning they are more effective at reducing mileage).  It makes sense that suburban areas are less effected by a congestion charge (demand is inelastic): without access to transit, a walkable street network, or nearby jobs and services, people have no choice but to drive, regardless of the price.

Mileage Fees Can Increase the Impact of Planning Decisions

Another significant finding is that a mileage fee may actually increase the impact that different land use policies have on driving.  According to Zhan Guo, one of the authors,

Mileage fees and land-use planning could be mutually supportive.  For urban planners, this finding suggests that switching from fuel taxes to mileage fees with rates that vary by congestion levels would strengthen the power of land use planning as a policy tool to shift some travel from solo driving trips to more sustainable modes like transit, biking, or walking.

In other words, if a mileage-based fee system were in place, choosing between (planning for) a high-density land use pattern rather than a low-density one would have a greater impact on vehicle miles traveled than that choice would today.

These results indicate that transportation and land use planning should be done in concert to achieve maximum benefits.  Benefits, in this case, meaning reducing congestion and/or increasing accessibility, making efficient use of land and internalizing externalities of land use decisions.

2 thoughts on “Mileage fees could strengthen the effect of land use policies on travel

  1. Great summary as usual. Just one caveat.

    The Minnesota State gas tax actually was increase a couple years back and a 3.5 cent/gallon surcharge to pay off bonds for bridge work is being phased in through next year. Doesn’t change the conclusions, but worth noting that states have in fact increased fuel taxes while the Feds have not since 1993.

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