Center for American Progress

Tolls on state highways would ease gas tax shortfall
In the News

Tolls on state highways would ease gas tax shortfall

Kevin DeGood explains why a well-designed, sophisticated tolling system in Michigan would not only ease revenue shortfalls but also allow the state’s highways to run more efficiently.

Since 1925, Michigan has raised most of the money needed to build and maintain its transportation system by taxing every gallon of gasoline and diesel fuel “sold, delivered, or used” within the state. The vehicle electrification revolution taking place in the automotive industry threatens this long-standing revenue source. Assuming a relatively rapid adoption of electric vehicles, Michigan expects to see a fuel tax revenue shortfall of roughly $1 billion a year by 2040. That’s a big budgetary hole to fill.

In December, the Michigan Department of Transportation (MDOT) released a study that looked at the revenue potential of tolling a portion of the state’s highway network. According to MDOT’s study, tolling 14 of the state’s busiest limited-access highways, including I-75 and I-94, among others, could yield between $1.5 and $2.8 billion annually. The most important reason to implement automated tolling isn’t revenue but ensuring that Michigan’s highways run as efficiently as possible, maximizing commerce, allowing for affordable, speedy personal travel and ensuring the state is meeting its climate goals.

The above excerpt was originally published in The Detroit News. Click here to view the full article.

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Kevin DeGood

Director, Infrastructure Policy


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