Can a per-mile fee replace the fuel tax in Florida?

The James Madison Institute released a report outlining how Florida can move to a VMT tax.

October 2020

Tyson Fisher


There has been a lot of talk about a vehicle miles traveled charge replacing the fuel tax at both the national and state levels. One Florida think tank wants to make that a reality in the Sunshine State.

In early July, the James Madison Institute, a Florida-based think tank advocating for public policy changes at the state level, published a report titled “The Road Ahead: Why Florida Should Shift from Per-Gallon Gas Taxes to Per-Mile Charges and How to Do It.” The institute, which considers itself a free-market think tank for Florida policies, breaks down why and how the state should move from a fuel tax to vehicle miles traveled fee.

Decline of fuel tax revenue

Like most states across the nation, Florida is seeing a drop in fuel tax revenue as vehicles become more fuel-efficient. Stating its case, the James Madison Institute projects what the future will look like if the fuel tax remains the same.

According to the report, the current average total state gas tax rate across all Florida counties is 36.7 cents per gallon. If fuel tax revenue remained constant, it would climb from about $4 billion today to nearly $8.5 billion

in 2050. However, using the Energy Information Administration’s projection, fuel revenue by 2050 drops to below $5.5 billion. Even worse, numbers from Bloomberg New Energy Finance put fuel tax revenue in 2050 at nearly where it is today, a $4.4 billion difference if fuel tax revenues remained constant.

Even if Florida were to bump up fuel tax rates, it still leaves electric vehicles off the hook in terms of paying for the infrastructure they use. That inequity, the report states, is one of the reasons why the state should transition to a VMT fee.

Transition to a vehicle miles traveled fee

The “why” in the vehicle miles traveled is easy to explain compared to the “how” aspect. For the James Madison Institute, the best way is to start with tolled roads and slowly branch out to open-access roadways.

Initially, the Florida Department of Transportation will study the four interstate corridors without tolls to determine a long-term rebuilding plan. This would be financed through toll revenue bonds. As each corridor reopens, all motorists would pay “per-mile tolls” instead of – not in addition to – the state fuel tax.

To calculate charges, FDOT would use the SunPass tolling system by calculating the amount of fuel each customer used driving the new corridor (based on the vehicle make and model plus its EPA highway fuel economy rating). Software would calculate rebates of the state fuel taxes that would still be in place for all other roads. Once all limited-access highways convert to the system, about a quarter of all Florida vehicle miles traveled would be under the VMT fee rather than the fuel tax.

Addressing the issue of the lack of transparency with fuel taxes, the report suggests an alternative billing approach for a vehicle miles traveled fee. Essentially, motorists will receive an annual statement similar to property tax bills.

The Owner-Operator Independent Drivers Association is broadly opposed to truck-only vehicle miles traveled fees. In a letter to Congress in January, the Association also expressed concerns about per-mile fees in general. Those concerns include issues like the cost of equipment to establish such systems, administrative costs for highway users, and the cost of enforcement.

“While this concept may sound appealing in theory, there are far too many questions and uncertainties … to begin implementing any sort of VMT program in the next highway bill,” the Association wrote. “While we are opposed to moving forward with a VMT program in general, we are particularly concerned about proposals that would single out the trucking industry for a truck-only VMT.” LL

J.J. Keller
Tyson Fisher

Tyson Fisher joined Land Line Magazine in March 2014. An award-winning journalist and tireless researcher, his news reports, features and blogs bring depth to our editorial content, backed with solid detail. Tyson is a lifelong Kansas Citian.