State Departments of Transportation (DOTs) today are seeking financing alternatives sothat transportation infrastructure investments can become less dependent on the amount of fuelU.S. drivers consume. Because the fuel tax in its current form is no longer viewed by many as asustainable and stable option, other financing alternatives are being considered. One suchalternative includes the vehicle miles traveled (VMT) fee. Examples of such VMT feealternatives include: 1) collection using an onboard diagnostic system (OBD); 2) collection at thefuel pump using an OBD in conjunction with GPS technology; and 3) collection at a vehicleinspection station using the OBD.The primary objective of this paper is to evaluate these three VMT fee alternatives interms of their benefits, challenges, and suitability for consideration in Massachusetts. A majorconclusion is that a fuel tax, if increased and indexed to inflation, is a viable short term financingapproach and that a VMT fee should be considered further as part of a long term strategy. It isexpected that the results of this research will be of interest to State DOT personnel and policymakers seeking new financing approaches and revenue streams to support transportationinvestments.
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