Thursday, February 26, 2009

"Controversial road-pricing scheme would become the dominant funding mechanism for road construction and maintenance by 2020."

'Blue-ribbon' panel endorses road pricing, shift from gas tax


The New York Times
Copyright 2009

A blue-ribbon federal transportation panel called today for a temporary gas-tax hike followed by a move toward charging drivers directly for every mile they travel -- two ideas that have been soundly rejected by the White House in the past week.

The controversial road-pricing scheme would become the dominant funding mechanism for road construction and maintenance by 2020, with drivers being charged an average of 2 cents per mile, according to the report released by the 15-member panel created by Congress in the last highway bill authorization. The National Surface Transportation Infrastructure Financing Commission says the shift is necessary because the current funding mechanism -- federal fuel taxes -- has failed to raise the necessary revenue for needed roadwork and runs counterintuitive to national environmental and energy goals.

"The more successful U.S. transportation policy is at increasing fuel efficiency and reducing both foreign oil dependency and carbon emissions, the faster its primary funding source, the gas tax, becomes obsolete," said Texas state Rep. Mike Krusee, a commission member.
Increases in fuel economy, coupled with the fact that the current federal tax on gasoline has remained stagnant at 18.4 cents a gallon since 1993, have already taken their toll on federal revenues to fund road construction and maintenance. The Highway Trust Fund, which receives the bulk of its money from federal fuel taxes, would have run empty late last year if it were not for an eleventh-hour transfer of $8 billion by Congress to keep it solvent.

"With the expected shift to more fuel-efficient vehicles, it will be increasingly difficult to rely on the gas tax to raise the funds needed to improve, let alone maintain, our nation's surface transportation infrastructure," said commission Chairman Robert Atkinson, president of the Information Technology and Innovation Foundation, a nonpartisan think tank.

To avoid the need for a similar transfer in the short term, the commissions calls for a temporary 10-cent increase to the federal gas tax, along with a 15-cent bump for diesel. The report estimates that the increases would generate $20 billion annually, which would close less than half of the federal funding gap but would enable current spending levels to continue.

Pricing advocates argue that the problem with the gas tax is that it fails to force drivers to confront the true cost of using roads and bridges. Because of the relatively frequent swings in the price of fuel, they say many Americans associate the tax with the cost of gas and not of driving. They argue that by pricing roads, Americans will drive less, in turn cutting congestion and the air pollution and oil consumption that accompany the gridlock.

Politically unpopular Both the long-term shift to charge drivers a fee for every mile they travel and the near-term move to increase the federal gasoline tax face a steep uphill battle to win support in Washington. Last week alone, the White House appeared to take both options off the table.
Transportation Secretary Ray LaHood drew a sharp rebuke from the White House after he suggested a vehicle-miles-traveled tax would need to be considered. "It is not and will not be the policy of the Obama administration," White House Press Secretary Robert Gibbs told reporters Friday after being asked about LaHood's comments.
Atkinson said the commission realizes that the current political climate might not be open to the pricing scheme. "We don't have to decide this now," he said. Instead, he said, the upcoming highway reauthorization -- which will set the national transportation strategy for the next six years -- needs only to include money for public education and research and development. Then, in the following authorization, lawmakers could make the commitment to the pricing scheme.

Despite the White House's opposition, several prominent congressmen -- including the two top members of the House committee charged with crafting the reauthorization -- have already expressed their openness to considering any and all alternatives to financing the roadwork.
"Conceptually, it makes good sense," House Transportation and Infrastructure Chairman James Oberstar (D-Minn.) said Monday, referring to taxing drivers per mile traveled. "I expect, if the technology existed in 1956, the founders [of the Interstate Highway System] would have used that instead of the gas tax."
Increasing the gas tax, on the other hand, may be even more difficult. One of the reasons the gas tax has remained unchanged in more than a decade is because of its political unpopularity. This past summer, as the price of a gallon of regular gasoline climbed above $4, lawmakers even considered a "gas tax holiday." While the price of gas has since fallen, the current economic climate makes any tax increases difficult.

"In a recession, when people are out of work, people don't have jobs, the last thing anyone, any politician is going to talk about is raising taxes," LaHood said Tuesday. "I am not for it, the administration is not for it."

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