Michigan is taking a proactive step to protect its road‑funding system as vehicles become more fuel‑efficient and electric models flood the market. The Michigan Department of Transportation (MDOT) announced a pilot program that will charge drivers a flat fee per mile traveled, rather than relying solely on traditional fuel taxes.
Why a new charge is needed
For decades, Michigan has funded the construction and upkeep of its highways, bridges and tunnels through a combination of a 6% sales tax on gasoline and a motor‑fuel tax of 31 cents per gallon. At the start of this year the state eliminated the sales‑tax component and raised the per‑gallon fuel tax to 52.4 cents. Even with that increase, the revenue stream is eroding because drivers are buying less gasoline.
MDOT’s own analysis notes that the link between road usage and fuel‑tax payments has become “a little more broken” as the vehicle fleet diversifies. Improvements in fuel economy and the rise of electric vehicles (EVs) mean fewer gallons are sold, which is good for the environment but problematic for the state’s transportation budget.
How the pilot will work
The upcoming pilot, slated to begin in February 2027, will run for six months and involve roughly 1,000 volunteers who agree to report their mileage. Participants will pay a modest fee of a few cents per mile driven. MDOT has not yet finalized the exact reporting method or the per‑mile rate.
Data collection could occur through a variety of mechanisms, such as smartphone apps, on‑board vehicle devices, or periodic odometer readings. One of the challenges MDOT anticipates is how to handle out‑of‑state drivers and those who frequently cross state or international borders.
What other states are doing
Four states currently operate road‑user‑charge (RUC) programs: Oregon, Utah, Virginia and Hawaii. Vermont is expected to join them in January 2027. These programs serve as models for Michigan’s effort, showing that mileage‑based fees can be administered fairly and effectively.
Funding gaps and existing fees
Michigan has already taken steps to offset lost fuel‑tax revenue by imposing additional fees on electric and hybrid vehicles, which rank among the highest in the nation. National data show electric‑car sales rising from just 0.1% of total vehicle sales in 2011 to 4.6% in 2021, with projections that EVs could represent 40% of new sales by 2030.
These trends underscore the urgency of finding a sustainable, vehicle‑agnostic funding source. A mileage‑based charge would apply equally to gasoline, diesel, electric and hybrid vehicles, ensuring that every driver contributes to the upkeep of the roads they use.
Next steps
After the pilot concludes, MDOT will analyze the data, project potential revenue, and make a recommendation to state officials about adopting a permanent road‑user‑charge system. The goal is to create a reliable, long‑term funding mechanism that supports Michigan’s transportation infrastructure while respecting the environmental benefits of cleaner vehicles.
For Michigan drivers, the pilot offers an opportunity to shape the future of road funding in the state. Those interested in participating should watch for further announcements from MDOT and the consulting firm CDM Smith, which is leading the study.
Original reporting: Warren | FOX 2 Detroit — read the source article.
