Michigan awards $6.3 million mileage tax study that faces conflict-of-interest pushback
The Michigan Department of Transportation has awarded a $6.3 million contract to a company that already sells the very tax system the state wants to study, drawing criticism from at least one state lawmaker.
MDOT awarded the contract to CDM Smith to conduct a feasibility study of a road usage charge, or RUC. The system would replace taxes at the pump with a per-mile tax. CDM Smith will also run a pilot version of the tax.
Rep. Matt Maddock, R-Milford, told Michigan Capitol Confidential that the state gave the contract to a company that already sells 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. He added that the report is an example of a contractor writing the case for its own product line.
CDM Smith states on its website that it supports the shift from traditional fuel tax revenue to what it calls "sustainable user-based fees." The company has worked with officials in Washington, Hawaii, Minnesota and Utah. CDM Smith did not respond to a request for comment.
What the contract calls for
According to minutes from the June 2 meeting of the State Administrative Board, which oversees state contracts, the company will work to make a mileage tax work in Michigan.
The pilot version of the tax will "explore technical feasibility, political palatability, and public acceptance factors needed to make RUC viable for Michigan," the minutes read.
The pilot will include project management, planning and procurement, statewide public outreach and education, and legislative engagement. Funding for the $6.3 million contract will come from state restricted trunkline funds, which are used to maintain and administer Michigan's highways.
Jocelyn Garza, a spokesperson for MDOT, said the 2026 fiscal year budget mandated both the study and the pilot.
The pilot program will start in February 2027 and run for six months, according to Jenny Roberts of CDM Smith, who spoke on the Talking Michigan Transportation podcast. Organizers hope to draw in about 1,000 participants. Roberts said efforts to educate the public will be a key part of the effort.
Public opinion and skepticism
Robert acknowledged that a 2024 study by the state transportation department found widespread negative views on road charges.
Of 19,000 respondents, 43 percent had a negative or slightly negative opinion on the mileage tax. Another 37 percent held a positive or slightly positive opinion and 19 percent were neutral. After respondents watched a video from MDOT, opinions shifted: 43 percent were positive and 34 percent were negative. The neutral share grew to 23 percent.
A former Michigan State Police officer who attended an August meeting of a committee advising the state on the mileage tax questioned whether a new revenue source was needed at all.
"When I look at a solution I ask what is the problem," the officer said, according to the minutes. The officer noted that electric vehicles are only 1.2 percent of registered vehicles in Michigan and are not responsible for the state's road problems. If a mileage tax is meant to replace funding lost to EVs, the officer said, the state should "address or look at other options and needs." The officer also noted that Michigan allows a much higher weight limit on its roads than other states, and that those heavier loads do more damage.
Michigan Capitol Confidential approached Rep. Pat Outman, R-Six Lakes, chair of the House Transportation and Infrastructure Committee, and Sen. Erika Geiss, D-Taylor, chair of the Senate Transportation and Infrastructure Committee, for comment. Neither responded.