WASHINGTON STATE ROAD USAGE CHARGE PILOT PROJECT TEST DRIVE THE - - PowerPoint PPT Presentation

WASHINGTON STATE ROAD USAGE CHARGE PILOT PROJECT

TEST DRIVE THE ROAD AHEAD

PROBLEM

Gas tax won’t fund future needs

* Of the 9.5¢, 8.5¢ is used by the state for highway projects, 1¢ goes to cities and counties for street and road improvements. ** The 11.9¢ gas tax increase was phased in over two years - a 7¢ cent increase on 8/1/2015, and a 4.9¢ increase on 7/1/2016.

WASHINGTON STATE GAS TAX BREAKDOWN

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BY 2028, UP TO 74% OF WASHINGTON STATE GAS TAX REVENUES WILL GO TO DEBT SERVICE PAYMENTS*

*Based on Net Fuel Tax Revenue and Debt Service projections per the Nov 2018 Forecast.

• Debt service only includes debt first payable by the fuel tax. This excludes SR 520 corridor debt service (first payable by tolls). It includes debt service paid first with fuel tax revenues, then reimbursed by tolls or federal funds.
• WA state’s portion of fuel tax revenue does not include all fuel tax revenue pledged for debt service. For example, fuel tax revenue distributed to cities and counties is also pledged for debt service.
• Beginning in FY 2020, revenue from select vehicle related fees (VRF) are also projected to be pledged to debt service for selected state projects, as approved in 2015.

20% 37% 68% 49% 74%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7 2 1 8 2 1 9 2 2 2 2 1 2 2 2 2 2 3 2 2 4 2 2 5 2 2 6 2 2 7 2 2 8 2 2 9

HOW MUCH OF WA STATES PORTION OF THE MOTOR VEHICLE FUEL TAX (MVFT) GOES TO DEBT PAYMENTS Based on Nov 2018 Forecast

% WA DEBT SERVICE OF WA NET FUEL TAX

HISTORICAL FORECAST

PLUG-IN ELECTRIC VEHICLES (PEVs) ARE ON THEIR WAY— THE ONLY QUESTION IS HOW QUICKLY?

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• Most automotive manufacturers have publicly staked out their plans to

electrify their lineups by 2030 (some sooner).

• China is driving growth in new vehicle sales (in 2018, US sales fell for the

first time in history).

• European countries are adopting aggressive regulations on gas-powered

vehicles (including banning new sales within the next decade). Automakers are adapting accordingly.

CROSSOVER POINT: WHEN PEVS COST THE SAME AS COMPARABLE ICE (GAS) VEHICLES

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2017 Bloomberg Forecast: crossover point will be 2026 2018 Bloomberg Forecast: crossover point will be 2024 2019 Bloomberg Forecast: crossover point will be 2022

AUTO MANUFACTURERS ARE SETTING THE PACE

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• Volvo: Starting in 2019, every new model will be a hybrid or

electric.

• General Motors: By 2023 they will have 20 electric models.
• Toyota: Plans to shift from limited to full-production of hydrogen

fuel cell vehicles by 2025.

• Ford: Investing $11 billion by 2022 to build a line-up of 40

hybrid vehicles, including 16 fully electric models.

• Tesla: Model 3 continues to be the top selling luxury car in the

US, selling over 187,000 as of May 2019.

ONE POTENTIAL SOLUTION

Road Usage Charge

ROAD USAGE CHARGE: A POTENTIAL SOLUTION

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• A road usage charge is a per-mile charge

drivers would pay for the use of the roads, rather than paying by the gallon of gas

• Washington is not alone – RUC West is a

consortium of 14 western states who are collaborating:

• 8 are conducting research
• 4 are testing (CA, CO, HI, WA)
• 2 have legislatively-enacted programs

(OR since 2015, UT in 2020)

Source: RUC West

WASHINGTON STATE’S RUC ASSESSMENT

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2012 Legislative Mandate: Identify a sustainable, long-term revenue source for Washington state’s transportation system, and transition from the current gas tax The basis of the assessment:

• RUC rate tested: 2.4 cents per mile
• State Gas Tax 49.4 ÷ 20 mpg (state average) = 2.4 cents / mile
• The pilot was a simulation of a real system
• We assumed revenue neutrality and focused on net revenue potential for both

RUC and the gas tax over 24 years (2019 - 2043)

• Assumed drivers would pay either the RUC or the gas tax, but not both

ROAD USAGE CHARGE STEERING COMMITTEE

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Legislature established RUC Steering Committee:

Three State Transportation Commissioners – one serves as Chair Eight Legislators – four Senators and four Representatives Representatives from:

• Auto and light-truck manufacturers
• Ports
• Environmental
• Counties
• Trucking industry
• Cities
• Public transportation
• Tribal
• Consumer/public
• WSDOT
• Department of Licensing
• Motoring public
• Business
• User fee technology
• Treasurer’s office

RUC PILOT PROJECT

Inform design of a fair-share approach

2015 Federal FAST Act establishes grant program:

• Surface Transportation System Funding

Alternatives (STSFA) $8.474M awarded to Washington state:

• Stage 1: Final design and set-up, $3.874M (complete)
• Stage 2: 12-month live pilot, $3.675M (complete)
• Stage 3: Evaluation and reporting: $925K (underway)

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WASHINGTON’S RUC PILOT PROJECT

WASHINGTON’S RUC PILOT PROJECT

Summary of Washington RUC Pilot Project:

• Year-long, statewide test of Washington-

designed RUC system for 2,000 test-drivers

• Cross-border testing:
• City of Surrey, BC
• Idaho Transportation Department
• Oregon Department of Transportation
• Additional partners: Seattle Electric Vehicle

Association and Plug-in America

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MILEAGE REPORTING OPTIONS AT A GLANCE

16 PLUG-IN DEVICES (WITH OR WITHOUT GPS)

• Automated mileage meter with GPS and

non-GPS options

• Plugs into OBD-II ports in vehicles 1996
• r newer
• GPS-enabled devices automatically

deduct out-of-state miles

MILEMAPPER SMARTHPHONE APP

• Records miles using a smartphone
• Works with all vehicles
• Navigational GPS can be turned on/off
• Available only on iPhone iOS

ODOMETER READING

• Post-pay for miles reported quarterly
• Report miles either electronically or in

person

MILEAGE PERMIT

• Pre-select a block of miles (1,000,

5,000, 10,000)

• Report odometer either electronically
• r in person every three months
• Obtain additional miles as needed to

keep mileage permit valid

LOW-TECH HIGH-TECH

28%

use

56%

use

1%

use

14%

use

37%

with GPS

19%

without GPS

REPORTING MILES VIA SMARTPHONE

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• App (iPhone only) developed for use by the

Washington RUC Pilot Project

• Works with all vehicles – no in-vehicle

hardware required

• GPS can be toggled on or off
• App provides breakdown of mileage traveled

in / out of staff (provided GPS is on)

• Participants submit occasional odometer

photo readings to help verify mileage driven

PARTICIPANT POOL: GEOGRAPHIC DISTRIBUTION

• Nearly 5,000 drivers from

across the state expressed interest

• 2,000 spots were

available - drivers from across the state participated

• The 2,000 participants

reflected our state’s geographic distribution

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% - Participant distribution (%) - Population distribution

WHAT WE’VE HEARD FROM DRIVERS

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Over 15 million miles reported and

mock-charged at 2.4 cents per mile

3 surveys, 6 focus groups, and

the project help desk actively gathered feedback

Over 1,900 emails and phone calls

received from test drivers (62%) and members of the public (38%)

Top concerns and questions:

• Privacy and data collection
• Compliance and

administration costs

• Fairness and equity
• Travel between states
• Operational viability

KEY FINDINGS

TAXING GALLONS HAS REAL FAIRNESS AND EQUITY CHALLENGES

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2 4 6 8 10 5 20 35 50 65 Cents per mile MPG

Per-mile revenue from 49.4 cents/gallon fuel tax by vehicle MPG

At 20.5 MPG, the average Washington driver pays 2.4 cents/mile in state fuel tax

Vehicles above average MPG pay less fuel tax per mile driven Vehicles below average MPG pay more fuel tax per mile driven

EVEN WITH ANNUAL GAS TAX INCREASES REVENUE WILL NOT KEEP UP WITH NEEDS

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Sort of like scooping water out of a sinking boat…..

• The gas tax would have to be raised about 1.5 cents per gallon, per

year on all vehicles from 2019-2043 in order to equal net revenues from a road usage charge of 2.4 cents per mile

• By 2043, drivers would be paying 85 cents / gallon – with reduced

purchasing power

RUC ≠ TOLLING

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RUC & tolling are separate tools in our tool box

• RUC is being looked at as a foundational funding source for the statewide

transportation system, replacing the gas tax

• Assumes drivers would pay RUC AND tolls – just like they pay gas taxes AND

tolls today

• Tolling is used to pay for a specific project and/or manage demand on a

specific corridor, with the revenues dedicated to that corridor or project

• While RUC could incorporate pricing for congested corridors, to do so requires

the mandatory use of GPS – and this conflicts with a key priority:

• Consumers must have a choice for how they report their miles, including not

using GPS

• Privacy trumps pricing

RUC ENABLES POLICY HARMONIZATION

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A RUC system presents the opportunity to harmonize transportation energy and environmental imperatives:

• The gas tax is one dimensional – it is collected as a flat rate at the distributor

level, and cannot be varied or customized

• There are current Washington State laws and policy goals related to VMT and

emissions reductions that are inherently in conflict with long-term transportation revenue needs

• Less gas consumption = less revenue for roads
• RUC is capable of accommodating policy goals and transportation revenue

needs

• Depending on policy priorities, decision-makers could choose to vary

RUC rates by factors such as vehicle MPG, vehicle weight, engine type, fuel source, etc.

OUT OF STATE DRIVERS

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• We need to be able to charge people from out of state for their

use of Washington roads

• In a potential RUC system, the state could keep the gas tax in

place while it slowly transitions away from it, and towards a road usage charge

§ NOTE: WA drivers would pay either the gas tax or the road usage charge – but not both

• Keeping the gas tax in place during a transitional period has

many advantages:

§ Provides adequate revenue to repay state highway bonds § Provides an easy way to collect from out-of-state drivers § Serves as “pre-payment” for any RUC owed at the end of the reporting period, allowing RUC balances due to be much lower

ALTHOUGH RUC IS MORE COSTLY TO COLLECT THAN FUEL TAX…

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…RUC PROVIDES MORE SUSTAINABLE NET REVENUE

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PILOT OPERATIONS

Quick-Takes

PARTICIPANT POOL: BY VEHICLE TYPE

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74% 8% 8% 5% 2% 2%

GENERAL OPERATIONS

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• Multiple rounds of system testing prior to launch reduced the number of bugs

and glitches experienced in the pilot.

• The WA RUC multi-jurisdictional interoperability HUB successfully

demonstrated how the WA RUC system can report miles and move funds across jurisdictions seamlessly.

• Private firms successfully carried out all system requirements, which would

allow the state to maintain a thin administrative layer at the government level.

• The enrollment process for the pilot generated the most inquires, but after that

few participants experienced issues that required contacting the Help Desk.

AVERAGE VEHICLE MPG & EV MILEAGE

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• The average vehicle MPG in Washington during the WA RUC Assessment

period increased from a fleetwide average of 20.5 MPG (2014) to an average of 23.1 MPG among WA RUC pilot participants (2018).

• This 12.6% increase in fleet MPG does not include the effects of fully-

electric vehicles.

• Fully-electric vehicles drove 31% less than gas-powered vehicles, while plug-in

hybrid electric vehicles drove 18% less.

• This implies that under a RUC system, EV drivers would pay less than

under a flat-fee system based on the average amount paid by gas vehicles.

ANNUAL COST IMPACT OF RUC ON PEV DRIVERS IN WASHINGTON

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• Using the WA RUC pilot test rate of 2.4 cents per mile: PEVs will pay more under RUC

than the annual PEV registration fee if they drive more than 9,400 miles per year.

• However, based on average miles driven by PEVs in the US (7,000 miles): Washington

PEV drivers would pay $168 in RUC — $57 less than the current state PEV fee.

• Based on WA RUC pilot data, Battery Electric Vehicles (BEVs) reported an average of

8,450 miles. Plug-in Hybrid EVs (PHEVs) reported 9,980:

• BEVs would have paid $203 per year under RUC — $22 less than the PEV registration fee.
• The average* PHEV would have paid $239 per year under RUC, $14 more than the PEV registration fee.

*NOTE: exact impacts on PHEVs varies by model, because some PHEVs have limited ranges in electric mode (e.g., 12 to 18 miles), and would use gasoline (and pay the gas tax) for daily travel in excess of this range.

MILEAGE REPORTING

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• The level of mileage reporting compliance was on average higher for

automated methods than for the manual methods, which required the driver to intervene periodically to report miles.

• Only 6% of the 2,033 participants switched mileage reporting methods during

the pilot, and only 1% decided to switch their private Service Provider (who manages their RUC account).

• The WA RUC system was able to accommodate multiple (5) mileage reporting

methods, including a “staggered” start – which is what would likely happen in a real RUC system.

RUC PILOT PARTICIPANT INPUT

Three Surveys, 12 months

PARTICIPANT SURVEYS – RESPONSE RATES

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Survey 1 Survey 2 Survey 3

Invited Completes Rate Invited Completes Rate Invited Completes Rate

Total 2,048 1,669 81.5% 2,106 1,569 74.5% 2,009 1,491 74.2% Respondents that completed the survey, received the incentive. Responses were included for those that answered most but not all questions. The total number of surveys analyzed for Survey 3 was 1,503. Because not all participants responded to every questions, the number shown may be below 1,503.

THINKING ABOUT YOUR FULL EXPERIENCE WITH THE RUC PILOT, HOW SATISFIED WERE YOU OVERALL?

38 48% 43% 5%2%

Very satisfied Satisfied Unsatisfied Very unsatisfied Unsure

91% were satisfied or very satisfied

THINKING ABOUT YOUR SPECIFIC EXPERIENCES WITH THE RUC PILOT , HOW SATISFIED ARE YOU WITH EACH OF THE FOLLOWING:

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64% 54% 62% 51% 41% 68% 31% 41% 35% 41% 41% 26% 3% 3% 2% 4% 3% 1% 14%

Ease of participating in the pilot Clarity of communications and instructions you received about the pilot Amount of time you spent participating in the pilot Opportunities to provide feedback on the pilot and your experience The guarantees made about the security of your personal information The opportunity to try something out before decisions are made about whether to implement

Very satisfied Satisfied Unsatisfied Very unsatisfied Unsure

BASED ON YOUR PARTICIPATION IN THE RUC PILOT , PLEASE INDICATE YOUR LEVEL OF AGREEMENT WITH EACH OF THE FOLLOWING:

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I am more aware of:

38% 28% 35% 26% 19% 30% 5% 13%

the amount of transportation taxes I pay than when I started the pilot how many miles I drive each month than when I started the pilot

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

Survey 3

WASHINGTON STATE NEEDS TO FIND AN ALTERNATIVE TO THE GAS TAX TO ADEQUATELY FUND OUR TRANSPORTATION INFRASTRUCTURE

Survey 1 (n=1,678) Survey 3 (n=1,497)

HOW DO YOU FEEL ABOUT IMPLEMENTING A RUC AS A REPLACEMENT TO THE GAS TAX TO FUND TRANSPORTATION INFRASTRUCTURE?

Survey 1 (n=1,683) Survey 3 (n=1,468)

BASED ON YOUR EXPERIENCE IN THE PILOT, HOW HAS YOUR ATTITUDE TOWARDS A RUC SYSTEM CHANGED?

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24% 24% 36% 7% 9%

Much more supportive A little more supportive Same as before my RUC experience A little less supportive A lot less supportive

WHICH OF THE FOLLOWING BEST REPRESENTS YOUR ADVICE TO ELECTED OFFICIALS AS THEY CONSIDER THE NEXT STEPS IN IMPLEMENTING A RUC SYSTEM STATEWIDE:

44 28% 33% 19% 9% 10%

423 493 284 139 152 Move forward now to implement a RUC system in place of the gas tax as soon as the program can be made ready Gradually phase in a RUC system over a five to ten year period so that it eventually replaces the gas tax Apply a RUC system only to vehicles that are paying no to very little gas tax (such as hybrids) compared to the average all-gas vehicle Apply a RUC system only to all-electric vehicles that are paying no gas tax Take no further action on starting a RUC system for the foreseeable future

HOW IMPORTANT TO YOU ARE THE FOLLOWING PRINCIPLES FOR A POTENTIAL RUC SYSTEM:

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89% 78% 75% 70% 65% 61% 58% 52% 39% 3% 5% 7% 8% 11% 10% 12% 13% 16% 6% 15% 16% 21% 19% 15% 24% 28% 23% 1% 1% 1% 2% 7% 3% 4% 13%

Privacy Simplicity Data security Transparency Cost-effectiveness Equity Enforcement User options Charging out of state drivers Very important Important Fairly important Slightly important Not at all important

WHICH TRANSPORTATION FUNDING APPROACH DO YOU THINK IS MORE FAIR?

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64% 19% 12% 6%

Survey 1 n=1,166

61% 16% 14% 8%

Survey 3 n=1,491 A road usage charge where you pay by the mile A gas tax where you pay by the gallon of gas A RUC and a gas tax are equally fair Neither the gas tax nor the RUC is fair

FAIRNESS ASIDE, KNOWING WHAT YOU KNOW TODAY , WHICH METHOD TO FUND TRANSPORTATION WOULD YOU PREFER?

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43% 9% 17% 6% 26%

Survey 1 n=1,670

53% 15% 19% 6% 8%

Survey 3 n=1,482 A road usage charge where you pay by the mile Equally prefer a RUC or gas tax A gas tax where you pay by the gallon of gas Don’t prefer either a gas tax or RUC Not sure/need more information (please specify)

Preliminary Recommendations

Out for Public Comment

Preliminary Recommendations – Background

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• WSTC received a final report with findings from the Steering Committee in

October 2019.

• WSTC reviewed the report and issued 15 preliminary recommendations on the

next steps for RUC in Washington.

• Recommendations include methods for transitioning to a RUC, key legislative

policies and considerations and potential topics to explore and study in the future.

• Final adoption of recommendations to occur at the December 17 WSTC

meeting.

Preliminary Recommendations – Transitioning to a RUC

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• Take a slow and gradual approach to introducing road usage charging (RUC) in Washington,

including a start-up phase to help inform a transition plan before there is broad, fleetwide adoption in the future.

• A start-up phase should include vehicles that pay little or no gas tax: plug-in electric and

hybrid vehicles, which currently pay flat annual fees regardless of miles driven. This will allow the state to continue to develop and test a RUC for at least five years before considering fleetwide implementation.

• Include state-owned vehicles in the start-up phase to test:
• New approaches to privacy protection
• RUC compliance and enforcement
• Travel between states
• Opportunities to reduce operational costs
• Improving the driver experience in transitioning away from the gas tax

Preliminary Recommendations – Key Policies

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• Implement privacy protection measures

in state law specific to a RUC system.

• Restrict RUC revenues to highway-

related expenditures by making RUC subject to the 18th Amendment of the Washington Constitution.

Preliminary Recommendations – Continue Research

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• Assess potential equity impacts of RUC on communities of color, low-income

households, rural communities, vulnerable populations, and displaced communities.

• Continue assessing RUC on a broader scale including testing new mileage

reporting options, assessing different approaches to RUC rate-setting and how to maximize compliance.

• In collaboration with other states, conduct additional research on different

approaches to reducing administrative and operational costs of RUC, assess how RUC would be applied efficiently to cross-border travel and assess compliance gaps and potential enforcement measures.

PILOT PROJECT TIMELINE

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We are here

www.waroadusagecharge.org

To stay looped in on our progress visit:

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CONTACT INFORMATION

Reema Griffith, Executive Director Washington State Transportation Commission griffir@wstc.wa.gov 360-705-7070

Consultant support provided by:

HEAR FROM WA RUC PARTICIPANTS

HEAR FROM WA RUC PARTICIPANTS