Michigan To Test Road Usage Charge Program

Michigan Gov. Gretchen Whitmer has allocated $7.8 million in the state’s fiscal year 2026 budget to study and pilot a road usage charge (RUC) program as a potential alternative to Michigan’s fuel tax.

The state previously sought federal funding for a pay-per-mile pilot but was denied a grant. Despite the setback, transportation officials continued pushing for the initiative.

Whitmer’s budget now includes funding to explore “potential road usage charge revenue options” to create a stable funding source for Michigan’s transportation network.

RUC systems charge drivers based on miles traveled rather than fuel consumed. Supporters argue this approach is more equitable, ensuring drivers of fuel-efficient or alternative-fuel vehicles contribute fairly to road maintenance.

Funding for the pilot would come from a one-time $7.7 million appropriation from the Michigan Transportation Fund and $171,900 in ongoing support.

Denise Donohue, CEO of the Michigan County Road Association, told MLIVE.com that local agencies were “pleasantly surprised” by the proposal. She emphasized the need for public input, citing that viewpoints differ across Michigan’s regions.

The pilot would address key questions, including how mileage is tracked, cost per mile and initial enrollment criteria. The Michigan Department of Transportation has not confirmed if it will follow its prior federal grant application model or adjust based on other states’ experiences.

States such as Utah, California, Hawaii, Oregon and Virginia have tested voluntary RUC programs. With Michigan facing a $3.9 billion annual road funding shortfall, finding a sustainable revenue source remains a priority for Whitmer and lawmakers.

Source: MLIVE.com