A road usage charge, or RUC, is a new way to pay for roads. It is a per-mile charge that drivers pay, replacing fuel taxes.

Most gasoline and diesel-fueled vehicle owners pay fuel taxes that are built into the cost of gas at the pump. As more cars driving Michigan roads are increasingly fuel efficient, gas tax revenues to fund roads, bridges and infrastructure are not keeping pace with inflation.

Michigan roads are funded by a mix of federal, state and local funds. Around half of state funding comes from the state gas tax, and half from vehicle registration fees.

There are a few challenges if we continue to rely on the gas tax. Vehicles are becoming more fuel efficient, and an increasing number of vehicles on the road use no gas at all (like electric vehicles). While cleaner, more efficient vehicles are good for the environment, transportation agencies may not receive enough money from the state gas tax to maintain Michigan's roads in the future! People with older, less efficient vehicles pay more than those who drive newer, more fuel-efficient ones. Many people feel there should be a fairer way to pay based on how much someone uses the roads.

Michigan Public Act 22 of 2025 also authorized the creation of the Technical Advisory Committee (TAC) on RUC. The TAC will guide the development and evaluation of an RUC study and pilot program to assess the potential, positive and negative findings for mileage-based revenue collection for this state’s roads and highways as an alternative to the fuel tax system.

It is important that MDOT conducts the pilot correctly rather than quickly. Given the timeline established by the 2025 legislation, MDOT needs through the end of 2027 to design, implement and evaluate the pilot and prepare a comprehensive report for the Legislature that documents key findings and lessons learned to inform future decisions.

MDOT is exploring a variety of options to report mileage in the pilot, including both location-based and non-location-based options. Pilot participants will be able to choose from low-tech odometer readings to higher-tech smartphone-based apps.