A mileage based user fee (MBUF) or vehicle miles traveled (VMT) fee is a user charge based on miles driven in a specific vehicle as opposed to the current excise tax on fuel consumed. At its simplest, the fee would be cents per mile. More sophisticated systems could assess different mileage fees based on factors like location, congestion, emissions, and type of vehicle. Policymakers are looking for ways to improve how to pay for our transportation system because the current funding system, based primarily on the federal and state excise tax on gasoline and diesel fuel as documented by the National Transportation Policy and Revenue Study Commission and others, is becoming obsolete due to reduced gasoline consumption and more fuel-efficient vehicles.
In 2009, the National Surface Transportation Infrastructure Commission concluded that we need a new approach to transportation infrastructure financing, “Direct user charges are the most viable and sustainable long term- user pay option for the Federal government.” To make it work on a national scale, an MBUF system needs to be tested, piloted and refined at the state and local level. That is a process which is occurring in multiple states and in several countries around the world.