State awards $6.3 million study on mileage tax

A company hired by the state of Michigan to study the feasibility of a mileage tax has come under fire for a conflict of interest from a legislator who says it could also benefit from the new tax.

The Michigan Department of Transportation awarded a $6.3 million contract to CDM Smith to conduct a feasibility study of a road usage charge, or RUC, to replace taxes at the pump with a per-mile tax. The company will also conduct a pilot version of the tax.

Rep. Matt Maddock, R-Milford, is concerned that CDM Smith could later benefit from the report’s findings. He told Michigan Capitol Confidential that the state awarded the contract to a company that already sells the pay-per-mile tax systems.

“A $6.3 million ‘feasibility’ contract to a company that already sells these systems is not independent analysis,” Maddock said in an email to CapCon.

The report is an example of a contractor writing the case for its own product line, he added.

The company states on its website that it supports the shift from traditional fuel tax revenue sources to what it calls “sustainable user-based fees.” It has worked with officials in various states, including Washington, Hawaii, Minnesota and Utah.

CDM Smith did not respond to a request for comment.

The company will work to make a mileage tax work in Michigan, according to minutes from the June 2 meeting of the State Administrative Board, which oversees state contracts.

A pilot version of the tax will “explore technical feasibility, political palatability, and public acceptance factors needed to make RUC viable for Michigan,” according to the meeting minutes.

The pilot will include project management, planning and procurement, statewide public outreach and education, and legislative engagement.

Money for the $6.3 million contract will come from state restricted trunkline funds, which are used to maintain and administer Michigan’s highways.

The 2026 fiscal year budget mandated both the study and the pilot, said Jocelyn Garza, spokesperson for the Michigan Department of Transportation.

The pilot program will start in February 2027 and last for six months, according to Jenny Roberts of CDM Smith, who spoke on the Talking Michigan Transportation podcast. Organizers hope to have 1,000 participants, she said.

Efforts to educate the public will be key, Roberts said.

Robert acknowledged that a study the state transportation department conducted in 2024 found widespread negative views on road charges.

Of the 19,000 respondents, 43% had a negative or slightly negative opinion on the mileage tax. Another 37% held a positive or slightly positive opinion and 19% were neutral.

After respondents watched a video from the Michigan Dept. of Transportation, opinions became more favorable: 43% were positive and 34% were negative. The share of respondents having a neutral view increased to 23%.

A former Michigan State Police officer who attended an August meeting of a committee advising the state on the mileage tax questioned the value of moving ahead with a new revenue source.

”When I look at a solution I ask what is the problem,” the minutes record the unidentified officer saying. Electric vehicles are not responsible for the state of Michigan’s roads, the officer said, adding that only 1.2% of registered vehicles are electric. If a mileage tax is meant to replace funding lost to EVs, the officer said, ”We need to address or look at other options and needs.”

Michigan has a much higher weight limit on its roads than other states, said the officer, adding that the higher weights impose greater damage on Michigan’s roads.

CapCon approached Rep. Pat Outman, R-Six Lakes, and chair of the House Transportation and Infrastructure Committee, for comment, as well as Sen. Erika Geiss, D-Taylor, chair of the Senate Transportation and Infrastructure Committee. Neither legislator responded.