Connecticut Department of Transportation Commissioner Garret Eucalitto is encouraging Connecticut drivers to participate in a mileage use fee study being conducted by the Eastern Transportation Coalition (ETC) that will help determine the feasibility of replacing gasoline taxes with fees based on the number of miles residents drive.
Launched on a website operated by the ETC, Eucalitto, who is also vice-chair of the ETC’s executive board, appears in a promotional video saying the state must plan ahead to ensure future funding for Connecticut’s transportation infrastructure needs.
In the video, Trish Hendren, executive director for ETC, a coalition of 17 states along the East Coast and Washington D.C., says that reliance on gasoline taxes is leading to reduced transportation funding as cars become more fuel efficient or drivers switch to electric cars.
“As more vehicles go farther on less fuel and others not using any fuel at all, it’s gonna be a lot harder to maintain our transportation system,” Hendren said, adding that the study intends to determine whether a mileage-based user fee (MBUF) would be both “fair and sustainable.”
Participants will have a device in their car that will register the number of miles they drive, and participants will also reportedly be interviewed regarding their experiences and thoughts on the potential program. Eligible participants will receive a $100 gift card after completion of the study, according to the website, and the coalition says participant’s information will be protected.
The study is being funded through the federal Department of Transportation as part of the USDOT’s Surface Transportation System Funding Alternatives study.
Study of a MBUF in Connecticut as a means of potentially altering Connecticut’s dependence on fuel taxes has long been a source of debate. In 2017, the General Assembly passed legislation preventing the CTDOT commissioner from using state funds for a mileage tax study without approval by the legislature.
At the time, the state’s Special Transportation Fund (STF), into which Connecticut’s two fuel-based taxes are deposited, was on the verge of falling into deficit as borrowing costs for infrastructure projects threatened to grow faster than fuel tax revenue, which had largely flatlined with more fuel-efficient vehicles.
As a state-based study of a potential mileage tax was shut down, newly elected Gov. Ned Lamont turned to highway tolls as a potential revenue source, but that push was ultimately abandoned after two years’ battle in the General Assembly.
Since then, the STF’s financial outlook has improved, largely due to inclusion of a percentage of the state’s sales tax, which has now become the STF’s largest single source of revenue. But, with Connecticut and the federal government pushing for more and more electric vehicles on the road, and greater fuel economy, fuel tax revenue could potentially decline.
In 2016, the state’s motor fuels tax took in $518.23 million and the state’s gross receipts tax for oil companies took in another $250 million.
In 2021, the motor fuels tax brought in $475.16 million and the gross receipts tax $229.06, marking a $64 million decline, although some of that decline may be attributable to the pandemic and more people working from home. Figures for 2022 were skewed as the legislature implemented a gas tax holiday to help ease the pain of high inflation.
According to the latest consensus revenue estimates, however, the STF expects $532.8 million in motor fuels tax in fiscal year 2024, declining to $496.9 million in FY 2026. The oil companies’ tax is expected to bring in $390.2 million in 2024, declining to $333.1 million by 2026.
The study is being conducted in partnership with Transurban, an Australian-based company that develops and operates toll roads in the United States and Australia.