Mileage Based User FeesUse as you cruise—alternativefunding to the fuel tax.

Use As You CruiseFuel taxes no longer meet the soaring costs of keeping up our highways. Is this time for repairs to the funding system?It’s a simple – and a very American – idea: Pay for what you use. Leaders today see mileage based user fees playing a role in future funding for surface transportation.

In 1903, Dr. Horatio Nelson Jackson became the first person to cross the United States by automo-bile. The trip took the Vermont physician 65 days in a 20-horsepower Winton, raising dry clouds of dust and chugging through axle-deep mud on mostly unpaved roads. Not until the 1930s could a vehicle cross the nation coast-to-coast on paved highways.

Today, the Dwight D. Eisenhower System of Interstate and Defense Highways comprises nearly 50,000 miles of paved multilane highways, bridges, tunnels and toll roads. As the largest highway network in the world and one of the greatest public works projects in human history, the system symbolizes America’s finest qualities: Innovation. Ingenuity. Inexorable progress.

But hello Houston (and Atlanta, L.A., D.C. and most everywhere else), we have a problem. As fast as the highway system has grown, cities have grown even faster. Today, transportation routes too often symbolize not America’s progress but its modern problems: congestion, fuel waste, crumbling infra-structure. Before our very eyes, the world’s finest surface transportation network, a great stimulant of American economic growth, suddenly appears as if it’s becoming a barrier to progress.

The greatest risk to the nation’s surface transportation system? Funding.

For decades, we paid for highway repairs and improvements through fuel taxes, at the pump. Every time we filled the tank, part of the bill paid for asphalt and concrete and steel and planning for our highway system. Today, fuel taxes no longer cover the costs of maintaining existing highways … never mind meeting the needs for new ones. Improved vehicle efficiency, alternative fuel use, higher construction costs, and less buying power per fuel tax dollar render the fuel tax funding model insuf-ficient … and wallop the wallets of federal, state and local transportation agencies.

What to do? Few policymakers want to raise taxes. Few businesses or commuters want to give up transportation freedom.

We arrive at a crossroads question: Is it time to look at a new, more sustainable, way of paying for highways?

Mileage Based User Fees 2

Mileage Based User FeesOne idea for funding surface transportation gets more traction by the year.

Tying user fees directly to the miles driven by a vehicle matches a usage pricing model favored by many businesses. Turn on a light, you pay for the electricity you use. Cell phone owners pay for the number of minutes they talk or text. TV aficionados pay extra for select shows. Drivers pay extra for electronic toll transponders in cars that let them skip tollbooth lines.

Use as you cruise. It seems a fair model for transportation...and more and more often, policymakers favor the concept.

A 2011 nonpartisan report from the Congressional Budget Office says this about a VMT (vehicle miles traveled) fee: “VMT taxes … would provide a better incentive for efficient highway use than fuel taxes do ...”

A 2010 conference report from the Miller Center of Public Affairs at the University of Virginia included input from former secretaries of transportation Norman Mineta and Samuel Skinner. A key recommendation: Innovative thinking is needed to develop the next generation of user fees. Specifi-cally, future funding mechanisms should not depend primarily on fossil-fuel consumption – which the government is actively seeking to discourage through a number of other policies – to keep up with transportation investment needs.

Technology already exists to bring mileage based user fees to daily life. In fact, trials in several states (and other nations) prove that existing devices and systems can efficiently collect data on mileage use, communicate the data to processing centers, efficiently analyze and document the data, then collect fees from users.

It seems the handwriting is on the road. So what stands in the way of mileage based user fees?

Key IssuesAdvocates of mileage based user fees face inertia on several fronts. For starters, some consumers and organizations worry the costs of implementing new technology and doing away with fuel tax legacy systems will be exorbitant. Others believe a change will mean more money out of pocket than they pay with fuel taxes. Still others argue that any redistribution of revenues will leave them with new, unexpected financial problems. Finally, because mileage based user fees require new systems that can measure travel and pinpoint the location of vehicles, privacy issues arise.

The court of public opinion matters most, and these questions must be addressed.

At the same time, planners, engineers and organizations in the transportation industry know full well that flexible tools wait, close at hand, that have the potential to alleviate congestion and promote economic development, environmental sustainability, social equity, and a better quality of life.

Mileage Based User Fees 3

Xerox Transportation ExpertiseXerox belongs in the mileage based user fee conversation. In fact, we’re already deeply in it.

For more than four decades, we have provided world-class services in transportation business processes and information technology services. We work with clients in more than 35 countries on problems ranging from fare collection and toll services to back-office processing and infrastructure installation. Our systems and services help resolve major transportation issues all over our globe.

Our transportation analytics, expertise and experience help customers in the sector make sense of data, turn trends into revenues, keep consumers moving. We pave the way for organizations to com-pete in toll road management and open-payment systems. We build sustainable modes of transpor-tation, analyze fare data, manage parking space systems, forecast the next new thing.

We stand uniquely qualified among the world’s companies to manage mileage based user fees.

We understand how to protect information that might create privacy issues – we’ve done it for many years, for clients large and small. Organizations value our expertise in creating economies of scale for collecting user fees, for finding ways to reduce the costs of collections. We’re recognized for our implementation skills, providing solutions and people that create the luster associated with out-standing customer service. We’re the back shop that runs systems and processes for agencies and organizations all over the world. We allow them to focus on their primary missions – to do what they do best.

We rank today as the largest provider in transportation for collecting tolls and parking fees. We’ve already mastered systems that rely on user fees – transit fares, parking tolls, and technology in road-way and transit systems. We’re also technology agnostic – no matter your legacy system, we can work with your IT backbone to handle collections and distributions of fees.

Finally, at the heart of our systems, lies document management. We invented document manage-ment, and we understand better than any other company the interface between document/billing systems and the human beings they ultimately affect.

That’s the real Xerox, in fact. We’re the company with a dynamic understanding of that interface between human beings and systems – where the rubber meets the road, in terms of information and systems management.

Who better to trust as you prepare a path for mileage based user fees?

www.xerox.com/transportation

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