Federal Action Needed to Support Transportation System

By: - August 6, 2008 12:00 am

It hurts to pay $60 to fill up my car. And I don’t drive an SUV or any other kind of gas guzzler. So I’m driving less, carpooling and taking public transportation. Other Americans are doing the same.

Just this week, oil prices dipped from their record-level highs and the average price of gas is below $4 a gallon. By all accounts this is a step in the right direction.

When people drive less, however, they fill up less. And this adversely affects the amount of revenue states and the federal government collect on fuel taxes, which historically funded roads, bridges and most of the nation’s transportation infrastructure.

As we mark the anniversary of the Minneapolis bridge collapse, we are all reminded of the importance of supporting our nation’s roads and bridges. The tragic incident has rightfully triggered an examination of our transportation infrastructure and funding system. And early results indicate we are coming up short on the funding side..

The Highway Trust Fund pays for a significant portion of the nation’s roads, bridges and interstate system. The federal gas tax has served as a key resource for the Highway Trust Fund. Since the federal gas tax was last increased in 1993, inflation and international competition for the raw materials used in transportation infrastructure have severely eroded the purchasing power of this fund.

A recent congressionally appointed commission said we need $225 billion every year for the next 50 years to meet our transportation needs. And this funding is the total investment.

At least 15 states have increased their gas taxes in a dozen years and several others are implementing alternative funding mechanisms in an effort to address identified maintenance and construction needs. At the same time, states are facing significant shortfalls in transportation funding. And the bulk of that funding comes from gas taxes.

In this current economic environment, there is little support for gas tax increases. However, if gas tax revenue can’t match the rate of inflation, transportation budgets suffer. Road and highway projects are delayed and postponed. In turn, jobs are lost.

With that said, our current method of collecting revenue and paying for transportation projects is broken. In the short term, an increase in the gas tax will ensure the Highway Trust Fund remains solvent, but beyond that, federal policymakers need to move toward new funding strategies.

States are looking at a lot of different opportunities. The gas tax has been the staple funding mechanism for core transportation projects and that’s changing. There is this realization that we can’t rely on the gas tax forever, and we have to find alternative methods.

Oregon, for example, is leading the way in developing new funding mechanisms for transportation projects. A pilot project confirmed the viability of the vehicle miles traveled (VMT) fee approach that charges a vehicle based on the number of miles driven in the state. Mileage data and fee collection occur at the fuel pump. An on-vehicle device identifies the mileage driven in the state and charges the appropriate fee, paid at the pump with a fuel purchase. You pay only for miles driven in lieu of the gas tax.

Other states have explored or started options for funding transportation by establishing toll roads, raising registration fees, monetizing road assets, bonding, and others. They have been making the hard decisions in the face of federal inaction in order to make sure they can maintain and construct the needed highway infrastructure.

State lawmakers understand the burden of high fuel prices on the consumer. State agencies and officials are gasoline consumers, too. And we are prepared to work closely with the federal government to develop a shared, long-term vision for financing and funding surface transportation systems that will enhance the nation’s prosperity.

The time has come for policymakers at all levels of government to take a serious look at transportation funding. An under-funded transportation system threatens our nation’s economic growth and global competitiveness, as well as the safety and quality of life all across America. The last thing we want is another tragedy like the one in Minneapolis. In order to avoid that, we need a concerted effort to maintain the safety of our roads even as we grimace at the price at the pump.

William T. Pound is executive director of the National Conference of State Legislatures.

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