Talking Michigan Transportation

Paying by the miles driven - where things stand

• Season 8 • Episode 257

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On this week’s episode of the Talking Michigan Transportation podcast, conversations about Michigan’s study and eventual pilot of a road user charge (RUC) system of funding roads and bridges and what is going on in other states and countries.

First, Barbara Rohde, executive director of the Washington, D.C.-based Mileage-Based User Fee Alliance (MBUFA), talks about her organization’s history and their work.

Rohde also talks about her conversations on the issue with members of Congress about the need for a sustainable funding solution as the fuel tax, the major source of bridge and road revenue since the early 20th century, provides diminishing returns as people drive more fuel-efficient vehicles.

Later, Patrick McCarthy, finance director at the Michigan Department of Transportation (MDOT), joins the podcast to offer an update on the RUC pilot and study mandated in 2025 legislation.

Jeff Cranson:

Hello, welcome to the Talking Michigan Transportation Podcast. I'm Jeff Cranson. Today I'll be talking about a familiar topic to regular listeners at least, and that's the ongoing efforts for a study and pilot of road user charges here in Michigan. So first I spoke with Barbara Rohde, who is the executive director of the mileage-based user fee alliance in Washington, DC, about their efforts, their membership, the advocacy that they do on this topic, and the efforts to try to educate people about why we need to shift away from the more than 100-year-old fuel tax as the major source of revenue to fund roads and bridges to charge people by the miles that they drive. And that's a true user fee. So she has a lot of interesting things to say. And then I spoke with Patrick McCarthy, who is the finance director at the Michigan Department of Transportation, and he's helping to oversee the process to implement a study and pilot of a road user charge system here in Michigan. This was required in legislation passed last year. It had some advocates in both chambers. And so Patrick is following up on that, and he had a lot of interesting things to say about the process and what that entails. So I hope you enjoy the conversation. As mentioned, we're back with Barbara Rohde, who is the executive director of the mileage-based user fee alliance. I'm always tempted to say association, but it's actually an alliance. Barbara, thank you very much for taking time to talk about this issue.

Barbara Rohde:

Well, it's nice to be here. Thank you for the invitation, Jeff.

Jeff Cranson:

So tell me first um about the history of the MBUFA, or you call it Mambufa. Is that how you say it? Mm buffa, right.

Barbara Rohde:

A lot of people say it sounds like a dance. Uh the let's do the mbufa. But um I I will tell you um uh the name came about because uh the chairman of the committee at that time said he thought that would be a good name. So we said, of course it will be a good name. And uh and we, you know, whatever you say, it sounds good to me. And and then um he said, uh, and then we got our we're a 501c3, and we got you know, we got approved by the uh IRS on our first um can, I guess our first proposal, which I hear is pretty unusual. And uh, and I said, I'm not going through that again. So we're you know, we have many people who said, well, we can rename it this and rename it that. And I go, nope, we're gonna stay with this name. But how this came about, it uh, you know, I don't think anybody believes that Washington needs one more association or alliance or whatever. Uh, but I was working on a project in Minnesota at the time, and uh Jim Woody was working on the project in Oregon, who really was the leader of all the mileage-based uh issues at that time. And, you know, we would we'd run into each other as we were going in and out of offices looking for money to start this project. And we finally decided that, you know, we both had worked on the Hill for a number of years, Capitol Hill, and we decided that it would be good for us to um, you know, to form an alliance so that we're not working against each other, but working for each other. So that is uh what we did in uh um 2015. Um uh no, 2010. I'll tell you the years go by. Uh and and really it took uh, I think it was 2016 when the FAST Act, we really worked on getting my uh money for uh pilots. That was our main concern to be able to allow states to have money to get started. So that is really what we what we did. And we started off uh pretty small, uh, but we've continued to grow and uh really try to shape this issue in the United States. But we also have international members. So um they're looking at what the United States is going to be doing too.

Jeff Cranson:

So what have you seen in terms of an evolution of thought um with with congressional members as you've talked about this now for this this many years? Because I think um you know, one of the things I say a lot, and uh I don't know if it sinks in, but um nothing else costs the save as it did the last time the fuel tax was increased, but yet we expect that to still cover what it used to, as if there's no inflation, as if there's no uh increase in wages and increase in costs of materials. So when you talk about this as a as a replacement, you know, as not an addition, but a replacement, a true user fee, right? You know, how does that resonate?

Barbara Rohde:

Uh well, I think that most it it really has changed over the years. When we first started in Buffa, um people were like, what? Uh uh, you know, you pay by the miles, uh, you know, instead of uh uh, you know, uh the gas tax. I mean, it was really, it took a lot of time. Uh and we did a lot of meetings. I think in the first four years, we met with a hundred members of Congress, which is a lot of people, to do uh meetings with and educate their staffs and just give them some background. Now, some people, of course, are are um, you know, no, this will never work in my district or my state or whatever. But what I have seen over the years, there really has been an evolution of thought. People understand that we're we don't have enough money to be able to um, you know, be able to keep up our transportation system the way it needs to be kept up. And I think they really are looking for ways to be able to do this. Now, I do believe with Hawaii, you know, mandating a road using charge right now, that will give us some more information uh of how a state reacts to this and you know, and and how we will go about it. But I have seen uh, you know, there are still people that are very skeptical about privacy and how this could work and you know, rural areas, etc. But in general, most people believe we need to find some alternative because people are not voting for a gas tax increase, as of right now, at least. I mean, they might in the future, but as of right now, but that's not the only culprit. The the other culprit is just the way life is going. And with hybrid vehicles, much uh higher mileage of just regular vehicles and um electric vehicles, even though we've heard a few downturns in the past month or two about electric vehicles, uh, they're still, you know, moving along at a pretty good clip.

Jeff Cranson:

Uh in the especially elsewhere in the world.

Barbara Rohde:

Exactly. Oh, I mean, you know, in Norway, uh, you know, we are looking uh uh we're talking to Iceland right now because they're the next nation. New Zealand has mandated that they are going to a total road charge system. They've headed for heavy vehicles and diesel vehicles before, but now Iceland has done it, and we believe that there'll be several countries in Europe before Toulon that will be doing it. So, yes, there's a lot of information from outside of the nation right now uh that we're trying to glean and get to people.

Jeff Cranson:

So you raised Hawaii and then you mentioned a couple of island nations. So um but let's talk about the two things we hear the most. You already mentioned privacy and you've got ready arguments, ready answers for that question. But then also uh this idea of interstate travel and how you deal with that, especially a state like Michigan, um, because 10 million people, but the vast majority of them are in the southern part of the state and near the border of two other states. So there's a mindset that you people from Indiana and Ohio will be uh, you know, milking the system somehow. So talk about that.

Barbara Rohde:

You know, um, I was in the Eastern Transportation Coalition, which um uh you know is pretty much uh states and cities along the East Coast. Uh they did a pilot, oh, I don't know, eight years ago, something like that. And they invited as uh uh many people to participate in it. Now I must admit, Jeff, that I was a participant myself. And when I plugged that little device into my Jeep, uh I was like, wow, they're gonna know where I'm going. Uh so I will I will say, you know, that was a thought I had. But then I pulled out and I only pretty much drive on the weekends here in DC. And, you know, it got to be, I was fascinated with how accurate uh the information was when I logged in on Monday morning on the computer. It was down to the mile marker on the interstate of where I was at. So I mean, I think the technology is there. A lot of people are very concerned about that. But what I saw myself was that it was just pinpoint accurate on, you know, because it shows where you break, etc. You know, I'm I'm sure other things do this too, but where it showed um where I was at. And when I crossed the line from Virginia into the District of Columbia, and it was just really pinpoint accurate. At least the device that I had was very, very good. Now, I'm sure there's going to be issues, positive there's going to be issues as we go along. But that's the reason we have to keep doing these pilots and do more, you know. I mean, we're very proud of what Michigan is doing is going to be doing. I mean, that's going to be a major state pilot for us to be uh gleaning information from. But we also need to have uh more pilots that do interestate, um, you know, because we need that kind of information for people to feel confident that these systems really will be working and that um, you know, uh Washington State in Oregon did a small one and and they found it was accurate. Um there it was only um, you know, play money, so to speak. It wasn't that they actually had cash going back and forth, as I remember it correctly, but we need much more than that. And that and also international, uh, you know, because one of the things that I know that Michigan has a lot of um Canadian traffic that's coming into your state at different times. So, you know, getting that kind of information is going to be incredibly helpful to us as we keep moving through this.

Jeff Cranson:

Yeah, no, that's a very good point. I mentioned uh the two other border US states, but our friends in Canada, there's a lot of cross-border traffic, both for work and for for leisure. And that's uh that's a really important point you made. So I guess talk about how you uh address those those privacy concerns and what you know can be done with the technology to guarantee that nobody's keeping data. Um that I mean, people are skeptical. So even if you tell them that, and even if you show them you know that the law says that that a company can't do that, they still don't necessarily believe it. So talk about that.

Barbara Rohde:

That that is really true. And let me tell you, the biggest discussion that I hear on the hill right now is who gets the data. I mean, that is really, really a hot topic. I mean, is it the federal government? Yeah, it's incredibly valuable. So I would say that's even higher than privacy right now. But I think you have to give people choices. I mean, you're going to always have people that are going to say, I do not want anybody to know where I'm going, period. And for those people, they can play a pay a flat fee. I mean, I I, you know, I just believe that you're going to have some of that. However, what I am seeing is that as we're getting younger members of Congress, younger staffers, you know, this is just part of their life, you know. I mean, you you you do uh uh Google Maps and it has, you know, a law wants uh that you're where you're at. And you know, that's just part of their life right now. They don't even really think about it that much. And I think that uh, you know, that's what I'm seeing is a difference on the hill. But for for us, what we're saying is that um we really believe that uh, you know, that we need to give people choices. But what I did when I was the other thing is, is that there is some technology that I have heard about. Now, this was not part of the one that I was a part of, but that you can just it you can turn off the location and just do the mileage. Or if you have um uh an odometer situation, that is still another situation. That is what Hawaii is doing. And they found it very, very successful. But each state is very unique on how they gather data uh and how they, you know, provide it to um uh, you know, to their customers, very frankly. And I think that what we are just saying is that we believe technology right now can almost do, you know, provide anything, even turning off your location and being able to give you just the mileage that you're doing. But if that happens then, the question of, you know, if you drive into Indiana, if you drive into Ohio, how does Michigan know that the miles were done in Michigan if you're not um you know showing where people are at? And those are the kinds of questions that I think some of these pilots are going to be doing right now.

Jeff Cranson:

So setting aside Hawaii um that you know is prepared to actually mandate this, what uh what state in the mainland is probably farthest down the road?

Barbara Rohde:

Well, Virginia is pretty good because they gave that as an option, you know, uh to people, and they've had incredible signups. I mean, it uh it's it's like I don't I can't remember the last time I saw the numbers, I think it was 20,000 people, that they would give the option if people wanted to just uh do um you know their regular fee or uh do uh a mileage-based fee. Uh the other one that's moving really fast, and this is Vermont. Uh there uh, you know, they are another uh situation where they have a mandate primarily on electric vehicles now, but it it's like it's like Hawaii. It's going to be staged. And of course, Utah is uh you know a major leader in this uh in the in the nation. And uh they've tested many, many things. And of course, they're they're uh mainly electric vehicles, hybrids, etc. But I would say right now, what I'm hearing uh is uh Vermont is probably the next one that's kind of been under the radar that will pop up uh pretty quickly.

Jeff Cranson:

And per capita there are a lot of EVs in Vermont.

Barbara Rohde:

There are, exactly.

Jeff Cranson:

But I uh but I have talked to Utah officials about it, and I I'm still amazed. Um, and Utah obviously smaller than Michigan population-wise, but a little bit similar in that you've got really one heavily metropolitan area and then the rest of it's pretty rural. So that's how how how is it they've gotten so many people to sign on in Utah, do you think?

Barbara Rohde:

Well, you know, I they they took their time. And one of the things that uh I I I think they've done very well with is that they had a very strategic program and they had very strong support from their governor, and uh and they've just been adding to it uh uh at you know at each time. And Virginia's similar, even though they have not and they are not as um um, I don't want to say, uh, they're not as public about it. But one of the things that they did, and we had them on an Mbufa call right before they launched, talking about their communications. And they took an entire year before they started this program working with reporters, you know, because giving them information, you know, having them see different uh sites like this. So I think both Utah and um Virginia did an excellent job on communication, uh uh, you know, out kind of outbound of uh beginning their projects. And that really helped. It's important that the press really understand this because uh we've seen some instances where they they don't, and and then just you know, some misinformation is quoted.

Jeff Cranson:

I think it's it's really interesting. Um, I've learned a lot about the Reason Foundation support for this last few years. I've spoken often with group Feigenbaum, your friend of mine at the Reason Foundation, and that uh that a free market think tank advocacy group is is aligned with so many people from both sides of the spectrum. And this is one of those things that brings people together, and I'm sure you see that in your conversations in Washington.

Barbara Rohde:

Absolutely. And and you know, this is not an issue that you just count on Democrats to be for and Republicans to be against. It's really impressive. Probably the strongest supporter we've had over 15 years has been the current chairman of the transportation committee, who is a Republican from suburban Kansas City. I mean, not a place I would think would be uh uh, you know, supporting mileage fees. But he what we are hearing is that uh a lot of the freshman members on that committee are uh are are wary, I will saying, of the continual transfer of funds from the general fund to support the highway trust fund. So um I think that uh, you know, he really is trying to look for new ways to be able to do this. And uh we are very hopeful. We have put in a request for a lot of funds to do regional pilots. We'll see if we're successful on that or not. But uh we really believe that uh this is an issue that um both Democrats and Republicans um both agree on and disagree on, but uh we've seen support from both sides.

Jeff Cranson:

And three members of the Michigan delegation are on that committee, and so it'll be interesting to talk to them more about that.

Barbara Rohde:

Absolutely.

Jeff Cranson:

Since you made that point about the trust fund, um I think I mentioned on a call with your board yesterday that a lawmaker just recently, just a couple days ago, um, asked if Michigan is still a donor state. Um nobody's been a donor state now for um what, 18 years probably.

Barbara Rohde:

It's been a long time. Yeah.

Jeff Cranson:

It's you know, yeah. Talk about that concept and and the why the trust fund is being propped up.

Barbara Rohde:

I I think that um you know, I was talking to committee staff about this, and uh and and and literally what um uh the Reason Foundation and other foundations are saying, I mean, it is a staggering number that's going to have to be transferred. And when I do my talks, I have one slide that shows the various um trust funds and who's in trouble, you know, Medicare, Social Security, all the all the trust funds we all hear about. Actually, the highway trust fund is the worst off of all. And I, and but I said, you know, I don't want to be up against Social Security for vote, you know, on the Hill. Uh, let me tell you, they don't want to get um, you know, people upset with uh getting their payments, but it just shows that the highway trust fund really is in trouble. However, you know, most of these members don't get a lot of time to spend on this. And I can see why you got that question about a donor state. I mean, I, you know, it's been years since I've heard that argument going on. But again, it is just a matter of, you know, trying to keep educating people uh on where we're at with this. Now, they do know that um, you know, we're in financial grave situation uh for the trust fund. Uh, but I think most people just keep thinking, you know, the money can come from the general fund. You know, we just have an unlimited supply. But that's not going to be the case this year. It's gonna, we're going to have to have some rein-in of the of the situation. And in our meeting yesterday, we heard from uh a former staff director that they really want to trim some of the programs. Uh, and I mean, some of the grant programs, not like the highway, you know, our traditional programs. But uh, but I mean, that's gonna have some pushback too, because there are people that I mean, the nothing goes into this legislation without somebody wanting it. And uh, you know, what do you I mean, somebody's gonna be pushing back on each one of those?

Jeff Cranson:

But there is a lot to be said for focusing more on formula programs and grant programs.

Barbara Rohde:

Yeah, sure. That that that is true, especially in these economic times. You're absolutely right, Jeff.

Jeff Cranson:

Yeah. So um, real quickly before we wrap this up, um, going back to how we have these conversations and the education that's necessary. Um, you've kind of been conducting your own focus groups for some time, and you grew up you grew up in what it sounds like could be described as the ruralist of rural America. That's true. I did. Talk about those conversations.

Barbara Rohde:

Well, I um uh I I grew I grew up in a very small town. I grew up on a farm in uh Pettibone, North Dakota. And I was on a panel one day, and and somebody in the chat said I used to hunt there. I mean, uh this was a Philadelphia group. I I was just so surprised. Anyway, and uh but um uh whenever I talk about what I do in Washington, uh, and I say that you know, I'm the executive director of a program that's going to uh look at trying to charge fees for miles, all of these farmers, everybody a hundred percent say, oh, that's gonna kill us because we have to drive 40 miles to the doctor. We have To drive, you know, 30 miles to do this. And you know, we're on the roads all the time. And so I look at them and they all have big pickups. Every one of them that I've talked to, at least, you know, have a big hunking pickup. And I say to them, what do you get with that pickup? 12 miles a gallon. Most of them get about 12, sometimes 15, if it's not, you know, too good. And um, and I say, you know, you're paying more than anybody. And we have studies that show that rural drivers will do better under this program than um uh than you know, the traditional people everybody think the urban drivers. And but nobody, it's really an issue to try to be able to uh you know bring them up. But we have, I believe, Colorado, when they did their pilot, they had the Farm Bureau on their uh advisory board. And uh, you know, I think one of the things I've always recommended is trying to get some farm groups uh to start talking about this. Because usually when uh, you know, when I talk to people back there, I I can't say I've had 100% converts, but I've had a few people that say, okay, well, I you know, I gotta think about this more. This kind of makes sense.

Jeff Cranson:

And that's the best you could hope for coming out of those initial conversations.

Barbara Rohde:

Exactly. Exactly, Jeff.

Jeff Cranson:

So we'll see. Well, Barbara, thank you so much. Uh, we could talk about this forever, and I'm sure um we'll talk again. But I uh I really appreciate your insight and your passion for this important topic.

Barbara Rohde:

Well, thank you for inviting me.

Jeff Cranson:

Please stay tuned. We'll be back with more talking mission transportation right after this.

MDOT Message:

Even with the best planning, backups and traffic congestion can occur during road construction. This can pose hazardous situations for both motorists and construction workers, particularly when drivers are distracted. Motorists are more likely than workers to be killed or injured in work zone-related incidents. Additionally, the leading causes of all work zone-related crashes are distracted driving and speeding. So it's crucial to do your part in ensuring the safety of both drivers and focusing on your most important task, safe driving. Slow down and stay focused.

Jeff Cranson:

So, Patrick McCarthy, who I introduced in the earlier segment, but I uh I should say needs no introduction. He's been on the podcast several times and does a great job of explaining complicated financial things that are imperative to uh Department of Transportation and all the things that go on there. Patrick, uh I wanted to talk to you again about the road user charge study and pilot. It's uh it's kind of your baby. It's been a lot of fits and starts, but uh the process is now finally underway. Could you talk about that and what the process entails?

Patrick McCarthy:

Sure, Jeff. Thanks for having me back on the podcast. Um, as you're aware, the the department tried a couple of years ago to um secure a federal grant for a road user charge pilot and study. We unfortunately were unsuccessful with that, um, with that effort. But in our 26 budget, um, we were provided the um funding and the um kind of the requirement to go forth and do a pilot and study of road user charges. Um we've we've created a technical advisory committee, which is made up of industry um uh folks from from both the side of the of the funds that will utilize the dollars, like MDOT and the County Road Association and the Michigan Municipal League, as well as um industry partners that will will help us to deliver on our transportation network, like MITA and ACEC, as well as some other um people with interest in um in the transition away from a fuel tax towards a road user charge.

Jeff Cranson:

Let me play the acronym card. MIDA is the Michigan Infrastructure and Transportation Association, and ACEC is the American Council of England.

Patrick McCarthy:

American Council of Engineering consultants. Yes. So yeah, thank you. We're nothing if not um an acronym-filled department. Yes, for sure. Um, so we we created the technical advisory committee and we had our first meeting here a couple of weeks ago now. We have prepared a request for proposals and put the advertisement out to the public for um bringing on a consultant to help us throughout this entire effort of uh the pilot and the study that um that we're undertaking. So that um advertisement is set to close at the end of the month, at which point then we will select a consultant to bring on board that will help us with all of the aspects of the road user charge um effort that we're undertaking.

Jeff Cranson:

Was the remind me, because I lost track of this, was the technical advisory committee part of the legislation, or is that just a good practice that we know from other states that have done this?

Patrick McCarthy:

It was a requirement of the boilerplate, but I would also say it was uh a good idea to have um kind of a steering committee overseeing the efforts that we're undertaking.

Jeff Cranson:

I don't know if you can reel them off off the top of your head. Um, maybe you can. Can you talk about the various members?

Patrick McCarthy:

I can do my best. So we've got again, we've got members from ACEC and MITA, um, County Road Association and MML. Um, we've got internal State Department representation from MDOT and Department of State and Department of Treasury and DTMB for the privacy and security of the data that we um will need to collect to do to do a road user charge. Um, we have representation from um university, uh Michigan State University as a member on board. And we have our um John Paracchio, who was a big advocate of road user charges and tolling um throughout the nation. But after we invited him to join our technical advisory committee, he is also now one of our um State Transportation Commission um commissioners.

Jeff Cranson:

Yes, and uh another uh frequent guest on the podcast. I I love having him on to talk about this very topic because he's been involved in it for so long and speaks very knowledgeably. So that's that's a good uh good rundown. I think um you mentioned that they they have their work cut out for them. I think we need to be very clear that it is an advisory committee, so they're not ultimately making some decision about whether ultimately Michigan does shift to some kind of road user charge system, but uh their input will be very valuable as you try to shepherd this actual study and pilot. Um can you talk a little bit about what you've learned from the other states that have already been doing this?

Patrick McCarthy:

Sure. I think that the um the biggest thing that we've learned from talking to other states is the fact that um you can't spend enough time on um the public outreach and the public engagement and education, uh, as well as trying to um make sure that the folks that someday will need to actually um handle passing legislation, our legislative partners are engaged on this discussion as well. We intend to do very robust outreach around the state, um, trying to reach all of the um the people that will be um impacted by a road user charge, the urban areas, the rural areas, um, you know, all of the citizens of the state, um, as well as I think we need to have conversations and um try to figure out how we manage interstate travel and and the sharing of um data and revenue collected among the different states um as people travel across our state lines.

Jeff Cranson:

Yeah, sure. That's uh that's a complication that always comes up, but with technology, um, there are definitely ways to do that. And I think what we've heard, what you and I have both heard from other states, is that a lot of times, oftentimes, as part of that engagement outreach process, as as soon as you're able to spend a few minutes with the people who have all those questions and they come to understand how it works, how it would work, the the privacy safeguards, the methods of making sure that we do capture out-of-state traffic, that they change their minds or at least become more open-minded to it.

Patrick McCarthy:

That's sure. And some of the surveys um before and after some of these um educational outreaches um reinforce that that the more that you can explain this to people, the less resistance they have to the idea of a road user charge. Once they understand what it truly means. And I also don't think people really understand how much they're currently paying to utilize the transportation networks around the state. Um, paying at the pump um is really essentially a road user charge. It's just that you're paying it per gallon that you're filling up your car with right now.

Jeff Cranson:

Well, that's exactly right. I mean, for more than a hundred years, uh, you know, from the beginning of really of autos proliferating, it was a user-free model and the the fuel tax worked very well for that. Um, but we've known now for some time that that's not keeping up, and that's even before hybrids and EVs came along. It was because our vehicles are getting better mileage, and that's a good thing for the environment, but they weigh uh you know roughly the same as they did 50 years ago. And um, so they're just as hard on the roads. But that's not really a question.

Patrick McCarthy:

I was agreeing, I was nodding my head and agreeing with everything that you were saying.

Jeff Cranson:

Yeah. No, that's that's good. This is this is pretty much what I wanted to accomplish with this part. So I uh as always, I I appreciate it and uh we'll be following closely as this proceeds.

Patrick McCarthy:

Yeah, um, thank you, and I appreciate your help. Um, you know, we'll definitely be engaging with um your folks, both from communications and governmental affairs, as we navigate these um these waters to, you know, like we said, at the end of this, we want to have a very good product that um provides a compelling story for the people that have to actually put this into legislation and roll it out um as a as a solution, not just a pilot or a study.

Jeff Cranson:

Yeah, that's really well said. Good point. Well, thank you, Patrick. Yep. Thank you, Jeff. I'd like to thank you once more for tuning in to Talking Michigan Transportation. You can find show notes and more on Apple Podcasts or Buzzsprout. I also want to acknowledge the talented people who help make this a reality each week, starting with Randy Debler, who skillfully edits the audio, Jesse Ball, who proofs the content, Courtney Bates, who posts the podcast to various platforms, and Jacke Salinas, who transcribes the audio to make it accessible to all.