Distance Based Fee:

Why Must it be Considered?

Minnesota relies heavily on the gas tax to build and maintain roads and bridges. While the gas tax continues to be a significant source of highway revenue, today’s vehicles are using less gas and are increasingly reliant on other energy sources like electricity. In effect, the public is driving more but paying less for gasoline and, consequently, less in gas taxes to sustain sufficient levels of highway funding. This trend is expected to continue and eventually accelerate.

A mileage- or distance-based fee is one potential way to close the highway funding gap and ensure everyone is paying their fair share. Minnesota, along with many other states, is being urged by the federal government to study and demonstrate alternatives to the gas tax.

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Empowering Transportation Choice

A Distanced Based Fee provides supports choice, accessibility and fairness.
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Equity

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All drivers pay their fair share for use of the roads; the more you drive, the more you pay

Ease of Payment

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Online technology for fast, automated, secure, and efficient payment; no hassle automated payment

Sustainability

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Incremental revenue generation that evolves with transportation choices; preparation for the future

Transparency

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Use and fee data are readily accessible to effectively plan trips; know the cost before you go

Privacy

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Onboard technology provides security of information; your information stays private

The Economic Sustainability of Minnesota’s Transportation System is Vital

  • Today the State of Minnesota collects about $500 million annually in motor fuel taxes (in addition to other taxes and fees) to maintain state, county, municipal and township roads. The gas tax is a primary source if highway revenue.
  • By 2021 the Minnesota Department of Transportation predicts revenue collections from motor fuel taxes will decline by 1-2 percent per year due to increasing vehicle efficiency.
  • Minnesota has 144,000 miles of roads and 5000 bridges, the nation’s 5th largest road network.
    • 50% of state highway pavements are more than 50 years old
    • 35% of state bridges are more than 50 years old
  • 7 million people live in Minnesota, the 21st most populace state in the nation
  • More than 60 billion vehicle miles of travel occur annually in Minnesota.

Focused Research Approach

  • MnDOT is currently developing transportation industry partnerships to demonstrate viability of DBF as an alternative funding concept.
  • The incremental approach is adapting technology and process for a gradual move toward DBF.
  • Traditional revenue sources like the motor fuel tax are declining but they are not going away; the objective is to retain and adjust the motor fuel tax in response to changes in future technology.

This approach prepares Minnesotans for the future by providing a sustainable, equitable, secure and transparent revenue model to fund transportation infrastructure.

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