KDOT outlines road-usage charge pilot findings, warns fuel-tax revenue will decline

Joel Skelly, director of policy for the Kansas Department of Transportation, briefed the Committee on Transportation on results from a Kansas Midwest road-usage charge (RUC) pilot and study, saying the work was intended to probe alternatives as motor-fuel tax revenue declines.

Skelly told the committee the pilot enrolled about 570 participants, produced a roughly 98% survey response rate among participants and used multiple mileage-reporting options to test user preferences and technical challenges. "As Kansans we have a strong pride in our transportation system and tradition in maintaining a quality system that serves all," Skelly said, framing the study as an effort to preserve that system while exploring sustainable revenue options.

The nut of the briefing was the fiscal problem RUC aims to address: as vehicles become more fuel-efficient and alternative-fuel vehicles increase, dollars from the per-gallon motor-fuel tax are projected to decline. Skelly said, based on the study's illustrative projections, a decline in state motor-fuel tax revenue is likely if no change is made to the revenue mix. He noted current state fuel rates are 24¢ per gallon for motor fuels and 26¢ per gallon for diesel and emphasized that the motor-fuel tax is levied per gallon rather than by dollar value of fuel.

What KDOT tested and who participated

KDOT and its consultants split the project into outreach, design and a three-month pilot. The pilot offered four mileage-reporting methods: a simple online odometer form (start and end readings), a smartphone photo of the odometer, a smartphone app using location services (GPS) to report in-state mileage, and direct in-vehicle telematics from an automaker partner. The pilot oversampled rural Kansas and reported geographic coverage across KDOT's six districts.

Skelly said the statewide EV share at the time of the study was about 0.5% of registered vehicles and — under KDOT's "slow EV growth" scenario — could rise to about 5.5% by 2040. He cautioned the EV share projections are sensitive to technology and market changes and that a pending bill referenced in the presentation (identified in the briefing as "2121") could change registration-fee assumptions if enacted.

Findings: preferences, privacy and perceived fairness

Survey results and help-desk feedback identified consistent user preferences: transparency about how charges would be calculated, clear pilot objectives, choice among reporting methods, and assurances of fairness and accountability. Skelly said 61% of pilot participants preferred a state agency administer a RUC program rather than a private third party, and that rural and agricultural participants in the pilot frequently said RUC felt fairer than the motor-fuel tax.

"Support actually grew from pre to post," Skelly said of participants' attitudes toward RUC, describing a modest increase in acceptance after hands-on experience with the pilot tools.

Technical, administrative and legal challenges

KDOT highlighted several practical obstacles. Location-based reporting can exclude private-property miles but raises privacy concerns; non-location odometer reporting cannot reliably separate private from public miles. Skelly said interstate accounting is a major unresolved issue: to fairly recoup use by out-of-state drivers or attribute miles driven across state lines would likely require regional or federal agreements echoing commercial systems such as IFTA (International Fuel Tax Agreement).

Skelly also emphasized that collection efficiency for a RUC is lower than for the current motor-fuel tax because the state now collects fuel tax at a few distributor points, whereas a RUC would involve millions of individual accounts. "Road usage charge is nowhere near as efficient to collect as a revenue mechanism as it is for motor fuels tax," he said, noting higher per-account administrative costs and the need for quality control and collections to address nonreporting or "leakage." KDOT staff and committee members discussed existing collection and enforcement work by the Turnpike authority as a point of comparison.

The pilot exposed practical edge cases: multiple phones connecting to a vehicle via Bluetooth, trips in rental vehicles or public transit, and participants whose Bluetooth headsets generated trip data. KDOT said the pilot helped identify those issues and that design choices (for example, requiring device confirmation when connecting to a vehicle) can mitigate some errors.

Costs and user willingness to pay

Costs rise with more sophisticated reporting technologies. Participants expressed willingness to pay a modest premium for convenience — many said they would pay $1–$5 a month for a more convenient option — but Skelly stressed that administrative costs and setup complexity mean RUC is not an immediate, drop-in replacement for fuel tax revenue.

What KDOT recommended and next steps

Skelly recommended continued discussion and study rather than immediate implementation. He urged considering RUC as one element in a diversified revenue mix, continued regional collaboration with Midwest partners, engagement at the federal level on interstate accounting, and further study of privacy protections, administrative costs, and technical standards. "Continue to work with our Midwest partners and then again, stay engaged at the national level," Skelly said.

Committee Q&A highlighted uncertainty about timing and scale of any transition and immediate budgetary impacts. Several legislators asked whether bonding or other short-term financing could bridge near-term gaps in the transportation program; Skelly replied KDOT is issuing bonds as planned and that the department expects to meet current commitments through the near-term planning horizon but that inflation and long-term revenue declines could reduce work in later years.

Why it matters

KDOT framed the RUC pilot as a response to an identifiable revenue risk: per-gallon taxes decline as fleets become more efficient and alternative-fuel vehicles grow. The pilot produced usable design feedback, showed modest post-pilot increases in participant acceptance, and underscored trade-offs among privacy, accuracy and administrative cost.

The committee did not vote on any policy during the briefing; members asked for additional data, including longer historical revenue charts and cost estimates for higher-technology reporting options. KDOT confirmed consultants on the project included CDM Smith, Burns & McDonnell, Geotoll and an automaker partner (Stellantis) and said it can provide the committee with more detailed cost and implementation information in follow-up briefings.

Ending

KDOT asked the Committee to weigh RUC as part of a broader revenue strategy rather than a single fix. The department recommended more study, regional coordination and continued public engagement before lawmakers consider statutory change or statewide implementation.