By EC Policy Intern Caroline White-Nockleby
Charging station at Liberty Park in Salt Lake City.
As a Utah resident and EC policy intern, I’m always interested to learn what my state is doing on transportation electrification. Around town, I see more and more EVs on the road, and charging stations have been installed everywhere from my favorite park to my local grocery store. Utah’s EV market share, nearly 10%, puts it in the top 20 U.S. states.
But Utah isn’t just taking strides in EV adoption. It’s also one of four states that has instituted a viable long-term strategy to address the decades-old shortfall in funding for America’s roads in the form of a statewide road usage charge (RUC) program, also known as a vehicle miles traveled (VMT) program.
The Case for RUC Programs
Fuel taxes (mainly on gas and diesel) are the main source of funding for the federal Highway Trust Fund (HTF), accounting for 83% of its revenue in 2023. But, for decades, HTF revenues have been declining. Increased fuel efficiency and federal gas and diesel taxes that have not been raised since 1993 (cutting their inflation-adjusted values by over 50%), combined with surging road repair costs, have led to a steady decrease in the fund’s annual income. The Congressional Budget Office projects that the HTF will face an approximately $280 billion total shortfall by 2034, with expenditures outpacing revenue by 2028.
Road repair in Sugarhouse neighborhood, Salt Lake City.
The situation is similar at the state level. While the HTF pays for around one-fifth of highway infrastructure investment, state and local governments pay for the rest. In 2022, only three states (Delaware, Montana, and New Jersey) fully covered road spending through charges to road users such as tolls, registration fees, and fuel fees. Though Utah’s funding situation is not as urgent as it is in other states (Utah’s highway transit funding is supplemented by 27.5% of the state’s sales tax revenues), it too must prepare for a future where cars use little or no gas—a future that is rapidly approaching.
Though EV adoption accounts for just 2% of the HTF revenue shortfall, many states have responded to these funding challenges by levying extra fees on EVs. Thirty-nine states, including Utah, now charge EV registration surcharges of $50 to $250. Nine states also tax public EV charging stations.
The problem? In many states, EV fees are set arbitrarily and punitively high, despite the fact that they are not a viable solution for the road funding crisis. For instance, levying a $250/year EV fee—more than twice what the average ICE vehicle driver pays in yearly federal fuel taxes—would raise less than 15% of the $280 billion HTF shortfall anticipated by 2034.
For this reason, policymakers, analysts, and industry associations alike are increasingly calling for a fuel-neutral road funding mechanism that can accommodate current and future drivers. A RUC/VMT program—which charges a small fee for each mile a vehicle travels—has emerged as one of the most popular solutions. RUC programs can enroll all vehicles, regardless of fuel type, and follow a “user pays” model where fees are proportional to the amount a vehicle is driven.
For RUC programs to work at scale, though, some wrinkles will need to be worked out. Concerns have been raised about maintaining privacy of location data. Different mileage tracking tools offer pros and cons for privacy of location data, reliability, and flexibility (see dropdown below). Pilot and small-scale RUC programs can help administrators test different approaches, identify obstacles, build capacity, and cut costs before statewide implementation.
Mileage Tracking Tools
Description | Vehicle or equipment required | Test Location | Data Privacy Pros & Cons | Reliability Pros & Cons | Flexibility Pros & Cons | |
Annual Odometer Reading | A state-approved official reads odometer on annual visit; fees paid in lump sum. | None | Hawaii | No location data collected | Risk of user fraud via odometer rollback or underreporting percentage of miles driven on state roads. | Driver self-reporting required to exclude non-state road mileage. |
Odometer Reporting with Smartphone | Driver periodically (e.g. 4x/year) submits odometer photo via smartphone app. | Smartphone | Utah, Oregon | No location data collected | Risk of user fraud via odometer rollback or underreporting percentage of miles driven on state roads. | Driver self-reporting required to exclude non-state road mileage. |
OEM-Connected Telematics Reporting | Drivers of vehicles with manufacturer-embedded telematics systems opt-in to sending mileage or GPS data directly to RUC service provider. | In 2023, nearly 75% of vehicles sold worldwide had OEM embedded telematics systems. However, different automakers use different telematics platforms and data schemas. | Oregon, Utah, Virginia | Requires OEMs to allow third-party access under strict privacy and user consent protocols. Some RUC programs and telematics systems collect location data (which can be scrubbed by a third-party contractor before data is sent to state). However, some RUC programs do not collect GPS data, and some telematics systems do not support continuous GPS tracking. | Little risk of user fraud. | Telematics systems that capture granular location data offer the capacity to exclude non-state roads from mileage count. |
After-Market Plug-In Devices | Users are given a device that plugs into their vehicle’s On-Board Diagnostics II (OBDII) port and transmits data via a cellular connection embedded in the device. Devices can be GPS-enabled or not. | Devices not compatible with all cars: pre-1996 cars, Teslas, Chinese EV imports, and others may lack the port or require custom wiring and third-party adaptors. | Oregon, Virginia | GPS-enabled devices collect location data; others do not. If collected, location data can be scrubbed by a third-party contractor before data sent to state. | Risk of user fraud via device removal, but device tamper detection measures or odometer cross-validation can limit risk. | GPS-enabled devices have the capacity to exclude non-state roads from mileage count; others do not. |
Note: test location sites column includes only the four states with permanent RUC programs, not states with RUC pilots.
Utah’s RUC Program: An Innovative Approach
While dozens of states have run RUC pilot programs, as of early 2025, only four—Utah, Virginia, Oregon, and Hawaii—have made theirs permanent (Hawaii’s will start in July of 2025). All programs are currently voluntary and allow only EVs and certain fuel-efficient vehicles to enroll. Utah’s, like Oregon’s and Virginia’s, lets EV drivers opt into the per-mile fee instead of paying the annual EV registration surcharges. Hawaii, meanwhile, plans to eliminate the annual EV registration surcharge and make the RUC program mandatory for EVs in 2028.
Utah’s program began in 2020, making it only the second state, after Oregon, to adopt one. As of December 2023, the program had over 5000 vehicles enrolled. The state currently charges 1.11 cents per mile and adjusts for inflation annually. As in Hawaii and Virginia, mileage fees are currently capped at the annual EV registration surcharge, meaning that cars enrolled in the program can pay less, but not more, than they otherwise would. At the 2025 surcharge rate of $143.25, an EV driven less than 12,905 miles per year would save money through the RUC program (this is less than the state’s 2022 average of 15,243 miles driven per vehicle per year).
Since implementation, adjustments have reduced administrative costs by over 60%, and mileage revenue is anticipated to exceed expenses for the first time in FY25. The state Department of Transportation (DOT) cut costs by reducing mileage reporting frequency and by removing plug-in devices as a mileage reporting option (drivers may now choose between OEM-connected telematics and odometer reading using a smartphone app). The program updates also eliminated any sharing of location data, addressing data privacy concerns.
Charging station at The Front climbing gym in Salt Lake City.
Though the RUC program is new, state policymakers are already looking to expand it. Utah law requires the state DOT to submit a yearly report recommending strategies to expand the program, toward the goal of enrolling all vehicles by December 31, 2031.
Reflecting the state’s leadership, Utah’s DOT director was recently named co-chair of the Federal Advisory Committee tasked with establishing a national RUC pilot. Utah’s RUC program represents a promising step towards crafting a road funding system that works for the future of driving—a future that, market trends predict, will be electric.