Sure, this could be in the transportation category but there's some government mixed in, so I'll throw it in politics. On to business. For the record, any references to the state should be taken to mean the state of California, but this could quite easily apply to other states in the future.
With the rise in interest in automobile fuel economy has come a nasty problem for the state. If everyone buys more fuel-efficient vehicles, gasoline tax revenues will plummet because people buy less gasoline. The governor has refused to restore the Vehicle License Fee to previous levels -- it was reduced in good economic times, with a warning that it could be restored later -- and the state doesn't like the sizeable hole in the budget deficit.
One of the ideas that has been thrown around is to assess a road usage tax based on distance driven. This tax would be assessed and collected every time a motorist stops to buy gasoline in the state.
Social problem: This can easily be seen as some sort of invasion of privacy. It's almost like the state is tracking your movements.
Possible solution to social problem: Cars in this state need to get smog checks every so often (2 years). This is when another person must interact with the vehicle, and can easily take an odometer reading. The distance traveled since the vehicle's last smog check is used to assess the road use tax, at a reasonable rate. When the vehicle's smog certificate is transmitted to the state, the vehicle's mileage is transmitted with it. It may help to require all cars which are used significantly to get smog checks, regardless of age.
Technical problem: how do you treat someone who is in the state on vacation, buys one tank of gas, then comes back some years later? Smack them with a huge bill? Or, conversely, how do you tax someone who lives on one side of the state line, but works (and buys gasoline) on the other?
Possible solution to technical problem: don't assess the road use tax at the pump. Where the vehicle spends its time doesn't matter, only the state in which it is registered. This may not be very fair, but you could register your vehicle in a different state. It follows the basic principle of taxing where the money is: states collect far more taxes from their residents than from non-residents and tourists. (In California, these border cases are probably so small in number as to not be worth worrying about; this may not necessarily be the case in New Jersey, which borders upon the cities of New York and Philadelphia.)
Fairness problem: drivers of fuel-efficient cars are against this, because it is "punishment" for buying less gasoline.
Possible solution to fairness problem: Though I am against paying unnecessary taxes, I find this argument specious at best. If funds to build and maintain roads are to be obtained from those who use them, it makes sense to charge more to people who use them more. And it is a well-known fact that heavier vehicles cause more wear and tear on roads. Therefore, compute yearly license fees based on unladen vehicle weight, which is generally easily obtained from the manufacturer. Assess a road use tax based on odometer readings at smog checks (see above). And adjust motor fuel taxes so that the road use tax becomes the primary source of highway maintenance funds.
In summary:
DMV Fees = base vehicle fees + vehicle weight tax + road usage tax
While I don't really have numbers to back up my claims, I suspect that the formulas could be tweaked so that most drivers would pay approximately the same amount -- within ten percent or so -- of driving-related taxes and DMV fees per year. And the state wouldn't have to worry about a sudden run on fuel-efficient motor vehicles (or even sub-compact cars). Given my current taxes and fees, I'm willing to pay no more than $0.05 per pound of unladen vehicle weight and $0.01 per mile, or about $284 per year in my case, on top of the base vehicle fees. Just promise to reduce gasoline taxes accordingly, okay?
Physicists may note that road wear and tear may be more accurately calculated my multiplying vehicle weight by distance driven. The usage of addition is meant to not totally soak people who choose (or are forced) to drive large vehicles, and to protect against a sudden buying spree of lighter cars.
Disclaimer: I have done no formal analysis or feasibility studies. This idea could be wildly unpopular if introduced in the state legislatures. But the legislatures aren't there to do what's popular; they should be able to make tough decisions.