HighLight Heading
November 2008
Germany's mileage-based tolling: a model for Minnesota?
In 2005 Germany launched a mileage-based tolling system for heavy commercial vehicles on its national motorway (Autobahn) network. Would such a model work for Minnesota? Leaders discussed the pros and cons at a “Rethinking Transportation Finance Roundtable” held October 1 on the Minneapolis campus.
German sign indicating toll road for heavy trucks
Gina Baas of CTS welcomed attendees on behalf of CTS and the State and Local Policy Program (SLPP) of the Hubert H. Humphrey Institute of Public Affairs. The occasional roundtables bring together Minnesota leaders to hear the latest ideas in transportation finance.
SLPP research fellow Barb Rohde moderated the first panel, which began with a description of the German system by Ferrol Robinson, principal with SRF Consulting Group. The system, a public-private partnership, places the government in charge of regulations, contracting, and enforcement and the private sector in charge of operations.
The rationale for the system was based on several factors, Robinson said, including an estimated 2 billion euro funding shortfall per year for roads. The system was also aimed at paying for some of the infrastructure costs— estimated at 3.4 billion euros annually—caused by heavy trucks. What’s more, foreign trucks drove 35 percent of Germany’s truck-miles, and many did not comply with emissions standards.
Under the tolling system, 50 percent of revenues are directed to roads, 38 percent to rail, and 12 percent to waterways, Robinson said. Annual revenues reached $5.3 billion in 2007, the number of “dirty” trucks fell from 50 percent to 20 percent, and empty truck trips declined by 20 percent. “The system largely succeeded in meeting its objectives,” he reported.
Adeel Lari, director of innovative transportation finance at the Humphrey Institute, said several factors are spurring U.S. interest in the German system. The Highway Trust Fund went into deficit this year, and Congress made a temporary infusion of $8 billion to keep it solvent. Minnesota raised its gas tax in May 2008—after a 20-year gap—and the federal gas tax has not been raised since 1993. The fuel tax itself collects less revenue as non-petroleum-based vehicles become more common and as mileage continues to improve. In addition, revenues are being eroded by inflation, the prices of materials are rising, and vehicle- miles traveled may have peaked.
A mileage-based fee, in contrast, is not affected by alternative vehicles or fuel efficiency gains, Lari said, although it can be designed to provide incentives. “Mileage-based fees are a more robust and sustainable revenue source than fuel taxes for transportation infrastructure financing,” he concluded.
Lee Munnich
Lee Munnich, senior fellow and SLPP director, raised a number of questions for Minnesota to consider if it moves toward a mileage-based system. For example, should revenues be dedicated to transportation? Should tolling be extended to other vehicles besides trucks? Should differential toll rates be used to reduce pollution levels?
Next, a panel moderated by Ken Buckeye, program manager with Mn/DOT, responded to these questions and posed some of their own.
Bernie Lieder, chair of the Minnesota House Transportation Committee, said selling tolling to the public and legislators is “a problem,” especially if trucks alone are covered. “Germany diverts funds for waterways and transit, which would be a difficult sell here,” he added.
Bernie Arseneau, division director for policy, safety, and strategic initiatives at Mn/DOT, said Minnesota is in a unique situation as a national leader in intelligent transportation systems implementation, particularly evident in the MnPASS pricing program.
Linda Koblick, a Hennepin County commissioner, said getting public support was a key element in the success of MnPASS. “The German approach is exciting, and it’s something we can do here,” she said.
Mike Erlandson, vice president of government affairs for SUPERVALU, said the trucking industry’s support of the gas-tax increase is proof that it is willing to pay more for transportation— if goods can then be moved more efficiently. “Ultimately, if you’re going to price to alleviate congestion, then you need to price the entire system, not just trucks,” he said.
Jeremy Estenson, director of government relations with the Minnesota Trucking Association, said the trucking industry is interested in a healthy transportation system but “remains concerned about keeping dollars spent on the roads.” He also suggested that any tolling system would need to be nationwide.
Barb Thoman, program director with Transit for Livable Communities, said the value of the German system is that it can do what fuel tax does—and more. It can be designed to reward efficiency, reduce greenhouse gas emissions, and meet other needs. “Certainly, it is a good idea for us to look at,” she said, adding that she hopes the next federal bill includes a pilot program and that Minnesota will be considered.