States Increase Road Use Fees to Fund Transport Projects
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Revenue-strapped states are increasingly relying on funding alternatives to fuel taxes to pay for maintenance and upgrades on roads and bridges. Included in the mix are road use fees, annual charges for electric vehicles and exploration of tolling mechanisms such as congestion pricing, all with an eye toward covering longer-term road funding needs.
“Since 2016, motor fuel taxes have declined as a percentage of transportation fund revenue going from 41.1% in fiscal 2016 to 37.6% in fiscal 2023,” according to a 2023 . “Motor fuel taxes represented the largest revenue source for transportation funds (37.6%), followed by license and registration fees (19.7%), vehicle sales and use taxes (11.2%), tolls (1.4%), and all other (30.1%).”
Now, numerous states are increasing their emphasis on alternative funding sources. and Virginia recently hiked road use fees, while Hawaii, Georgia, Rhode Island and New Jersey are raising usage fees on EVs.
launched in 2023 to gradually add a road usage fee to sales of diesel and gasoline. The fee, which currently stands at 5 cents per gallon, will remain at a peak of 8 cents from July 2028 through July 2032. After that, the fee will receive inflation-based adjustments. .
Traffic on the New Jersey Turnpike.Hawaii, Georgia, Rhode Island and New Jersey are raising usage fees on EVs. (Emile Wamsteker/Bloomberg)
The state also announced inflation-based increases on certain commercial vehicle fees. Commercial driver licenses now cost $17.50, up 42 cents from last year, while the registration fee for a commercial EV weighing more than 26,000 pounds rose about 5% to $173.65. Registration fees for plug-in EVs rose to $60.05, also a 5% jump.
Virginia raised by $3.74 its annual highway use fee for all EVs; the levy will now be $131.88 from July 1, 2025, through June 30, 2026. The state also increased by 6.4% annual highway use fees for a wide variety of what it considers energy-efficient vehicles; the across-the-board increase applies to 76 fee structures for vehicles with fuel economy ratings from 25 mpg to 100 mpg. Commercial vehicles with a gross weight over 10,000 pounds are exempt.
light-duty passenger EVs a road usage charge of $8 per 1,000 miles capped at $50, or a flat annual $50 rate. Starting in July, both options replaced a $50 EV registration fee. By 2028, the state per-mile road usage charge will be required for all EVs. Eventually, it will apply to all vehicles, said Ed Sniffen, director of the Hawaii Department of Transportation.
“Instead of paying based on what type of car you drive — or can afford — a road usage charge means vehicle owners will pay only for how much they actually drive. It’s a much fairer way for everyone to contribute to keeping our roads and bridges safe and operable,” he said. “We are starting initially with EVs and aim to phase all light-duty passenger vehicles into the program by 2033.”
Nils Jaeger of Volvo Autonomous Solutions says self-driving trucks will complement the industry’s workforce as freight demand grows. Tune in above or by going to .
, annual EV licensing fees rose by 6.8% to $352.56 for commercial motor vehicles, and to $234.97 for all others. Vehicles powered by compressed natural gas, liquefied natural gas or liquefied petroleum gas as well as non-plug-in hybrid EVs are exempt. Plug-in hybrid EVs that are issued alternative fuel vehicle license plates are subject to the fee.
to $260 through next June. State legislation requires an annual $10 increase from 2024 to reach $290 by 2028. Rhode Island in July adopted annual registration fees of $200 for EVs and $75 for plug-in hybrids. , will be reviewed in 2027.
In April, for EVs and a $50 annual fee for plug-in hybrids. The fees jump to $250 and $63 in 2026. Drivers who pay for two years in advance this year can lock in the lower rate.
“If you drive a gas-powered car, you already help pay to maintain Pennsylvania’s road and bridge network through gas taxes. The new law creates a fair way for all drivers to help maintain Pennsylvania’s transportation network, ensuring that EV and PHEV owners who pay no or very little gas tax are also contributing to Pennsylvania’s Motor License Fund for highway and bridge maintenance,” the state said.
In a similar move, for EVs ($125) and plug-in hybrids ($100) took effect in January.
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In Indiana, lawmakers approved a controversial proposal to seek federal authority to become the first state that charges tolls on interstate highways, a move made over the objections of state truckers.
The Illinois Tollway in July approved a 20-year that will include consideration of regular updates to toll rates as well as exploration of so-called “dynamic pricing,” also commonly called congestion pricing. A state spokesperson stressed that the board “has not undertaken any discussion or consideration of dynamic pricing, which was simply a concept mentioned” in the plan.
