No Free Ride

Gas taxes, federal and state, are key revenue sources for public investments in transportation infrastructure and operations. At the federal level, the gas tax has been around since 1932, although it wasn't actually made exclusively available for transportation purposes until the 1956 Interstate Highway bill. A brief history is available here.

The federal gas tax has been the static -- at 18.4 cents a gallon -- for fifteen years now. And revenue has taken a hit in recent years with demand growth slowing down in reaction to high crude oil prices driving up gasoline prices. Consumers are buying more fuel-efficient cars (number of hybrids on the road: One million and counting) and even driving less.

The laudable policy enacted in the last energy bill should accelerate the trend towards less oil-derived fuel use by requiring manufacturers to provide more efficient car and truck choices for consumers and by ramping up production of biofuel alternatives to gasoline. And hopefully we'll see more such policy, further reducing the oil intensity of our economy.

Meanwhile, inflation has driven up costs of materials and labor needed to build and repair infrastructure. And in the case of public transportation, energy prices have driven up operating costs since buses and rail are mostly fossil-fuel-dependent.

All of this adds up to a crisis for transportation finances and funding. How to move forward?

As my friend and colleague Kaid Benfield has written, the first priority should be to make sure we make better use of scarce revenue.

Second priority should be to come up with new means of funding investments. The biggest idea out there is a shift to a mileage-based road user charge, a concept which Oregon is pioneering (fitting, since it was the first to adopt a gas tax). The state just completed a successful trial run with almost 300 participants. Advantages include the ability to use the same system for collecting revenue, i.e., charging users at the pump, and a pretty tight connection between use of infrastructure and the charge. The last is of interest to those of us concerned about climate, since the incentive will be to reduce driving which reduces global warming pollution.

A potential drawback is that vehicles would get charged the same amount, whether they are large or small, gas-guzzling or not. This, however, can be remedied as explained by Professor David Forkenbrock, one of the leading experts on this policy who is currently field-testing this idea in six regions across the country. His idea, explained in a paper presented at this year's meeting of the Transportation Research Board, is to vary the fee charged not just by mileage but based on the type of vehicle.

He also proposes charging more based on congestion. This is another pricing idea that Switchboard readers have read about before thanks to Rich Kassel, who has been championing the cause in NYC. And again, this is of interest to those of us concerned about the environment because it provides a disincentive for driving and therefore pollution.

On the investment side, regardless of the pricing mechanism(s), revenue must go to build more energy-efficient transportation alternatives for consumers, in lieu of driving.

The bottom line, as Fred Hiatt said in a Washington Post op ed about the recent setback for congestion pricing, is that new ways of pricing roads are inevitable. And it's up to you and me, and others who care about the environment, to make sure that they cut pollution.