From flailing transit systems to inadequate maintenance, states throughout the country are struggling to adequately fund their transportation infrastructure. Making the problem more difficult is the fact that one of their primary funding mechanisms, the gas tax, is failing to cover added costs. Due to projected revenue decline from increased fuel efficiency and EVs, the political aversion to raising the tax, and looming fiscal cliffs, some state legislatures are beginning to consider how to supplement gas tax revenue to sustainably fund their transportations systems.
user fees
Who pays for roads? Users, but only partly
Subsidies are common across transportation modes, but it’s useful to have the numbers. A recent report by the Tax Foundations, updated data on the portion of roads paid for by travelers and shippers—fuel tax, tolls, and other user fees—by state. The figures range from 12 percent in Alaska to 76 percent in Hawaii, based on fiscal 2014 figures. The report does not give a national figure, but a previous version estimated user fees cover just 50 percent of road costs.
Support for transportation taxes and fees: Gauging public opinion
The Mineta Transportation Institute has released its seventh annual survey report of public opinion on a variety of tax policies for funding transportation. Over the years, support for transportation taxes—with the notable exception of a flat rate mileage tax—has grown across demographic groups. However, those who drive the most were the least likely to support user fees. The study found support for a new tax or fee was highest if the new revenue went to maintaining existing streets and highways or if the revenue was dedicated to improving safety.
Northeast looks at GHG reductions that boost the economy
Clean transportation investments funded by market-based user charges would reduce greenhouse gas emissions while also providing a net economic benefit, a study for five Northeastern states and the District of Columbia contends.
Northeast looks at GHG reductions that boost the economy
Clean transportation investments funded by market-based user charges would reduce greenhouse gas emissions while also providing a net economic benefit, a study for five Northeastern states and the District of Columbia contends.
Beyond silos—Funding a multimodal transportation system
There is an increasing urgency to addressing the transportation funding crisis, not simply for highways but system-wide. As urban areas—where most of the country’s population lives—become increasingly multimodal, a shift in the funding paradigm is required for such a system to truly flourish.
VMT in the news: A warning to investors, a policy lesson for Congress, a reality check on climate policy, and charts
Flat-to-declining highway transportation demand has been with us for about a decade, and consensus is building for the position that it is not a historic aberration but rather a durable trend. A roundup of recent VMT-related news.
Virginia drops retail fuel tax; states struggle with transportation funding
When Governor Bob McDonnell signs HB 2313 into law, Virginia will become the first state to completely eliminate the retail fuel gas tax. As revenues from per-gallon fuel taxes continue to drop, states are searching for ways to bolster their transportation revenues.
Economist urges less general revenue, more user fees to support air travel
About 70 percent of the FAA’s funding comes from charges related to use, while the TSA covers only about a third of its costs with user fees. A stronger user-based system, one economist argues, would be fairer, would direct resources where they are most needed, and would protect the system from uncertainty in Washington.
Wisconsin is most recent state to consider mileage-based user fee
Wisconsin is the most recent state to consider a mileage-based user fee. Although other states have considered such fees, none has yet been implemented. Although the political climate is hostile to additional taxes, many states are realizing that they have little choice but to find new revenues for their transportation systems.