Impact of Energy Efficient Vehicles on Gas Tax (Highway Trust Fund) and Infrastructure Construction, Upgrade and Maintenance

Principal Investigators

  • Dr. Utpal Dutta
    University of Detroit Mercy

Project Dates:

September, 2011 to June 2012

Project year: Year 1

MIOH-UTC Project Identifier: TS 51

Focus Area:

  • Research: Intelligent Transportation Systems


The Federal Highway Trust Fund provides the funding for transportation improvements, including 100 percent Federal funding for infrastructure improvements and about 60 to 70 percent of funding for public transit improvement. The major funding for the Highway Trust Fund is the Federal tax on motor fuels which was 24.5 billion dollars during FY 2000. In recent years, use of alternative fuels for transportation along with electric vehicles is generally encouraged, and the current tax mechanism and other subsidies provide incentive for use.  In addition, recent changes to the Federal Corporate Average Fuel Economy (CAFÉ) standards, mandating significantly increased fuel economy in coming years will hasten this trend. This increase has created a significant negative impact on revenue levels deposited in the Federal Highway Trust Fund. This results in the reduction of funds available for transportation improvements now and for years in the future. Thus, it is essential that the impact of fuel efficient transportation systems on the transportation improvement funding should be quantified and avenues developed to come up with the adequate funds for the nation’s infrastructure/transportation improvement. It is to be noted that maintaining and upgrading of the transportation system is directly related to system efficiency. While most professionals in the field believe the short-term solution is to raise the unfair gas tax, many consider the long-term solution to be changing the way the revenues are generated, adapting a per-mile driven user fee, known as a Mileage-Based User Fee (MBUF). MBUF offers fair, flexible and higher yield than any other funding options including toll roads, raising taxes, congestion pricing etc.

The Purpose of this research:

  • Determine the impact of the use of energy efficient vehicles that resulted in the reduced consumption of petroleum-based motor fuel.
  • Assess the extent of increased use of energy efficient vehicles and reasons for accelerated use where present.
  • Develop/recommend means (including MBUF) to ensure a solid level of funding is provided for transportation improvement in relation to the use of the transportation system.
  • Identify challenges for implementing the recommended means.
  • Prepare a report presenting findings and recommendations for agency professionals and elected leaders.

Final Report:


Total Budget: $64,133