Pictured: ODOT Fair Miles Oklahoma Study
ODOT Studies Alternatives to Fuel Tax
Fuel tax revenues are declining nationwide due to increased fuel efficiency of vehicles and the transition to electric vehicles or other alternative energy sources. It is predicted that funding from fuel taxes for roads could be cut in half by the year 2040. To maintain funding for roads, Oklahoma is one of many states exploring a pay-per-mile alternative to replace the current fuel tax model. This would include the future collection of user fees by charging drivers based on the miles they drive instead of the number of gallons of fuel they purchase.
The total cost of the study is estimated at $3.9 million with ODOT paying half the cost and the remainder paid by a matching federal alternative transportation grant. The study will determine a per-mile rate necessary to replace the current fuel tax rate. According to ODOT spokesperson Bryce Boyer, “The program is designed to be fair and equitable, ensuring all drivers in the state pay for using roads.”
The legislation specifies that the study must be completed no later than December 31 , 2023. Earlier this year, participants were selected to report their monthly mileage over a six-month period. Registration began in February 2023 and more than 440 Oklahomans in 63 counties signed up to participate in the study. The project includes vehicles with varying fuel efficiency levels ranging from older cars with 8 mpg to electric and hybrid vehicles with more than 40 mpg. There are 19 other states that have completed similar studies and some of those are implementing pay-per-mile programs.
Participants report their monthly mileage through a variety of methods, including submitting photographs of the odometer via an application, an automatic-reporting device attached to the vehicle, or internal vehicle technology similar to OnStar. Each participant receives a mock invoice with a simulated charge for the miles driven and they provide feedback to ODOT.
Oklahoma’s fuel tax of 20 cents per gallon is one of the lowest in the country – only four other states have a lower tax. The average state fuel tax in the United States is 37.55 cents per gallon. California has the highest tax rate at 62.9 cents. A federal fuel tax of 18.4 cents per gallon for gas and 24.4 for diesel is paid in addition to the state’s fuel tax.
Other options to replace fuel tax revenue, such as vehicle registration fee increases, are not part of the study and would be up to the Legislature to consider.