The cornerstone of the National Surface Transportation Infrastructure Financing Commission’s recommendations for rescuing the federal highway program is a mileage-based tax, an idea President Barack Obama rejected even before the commmission released its final report this morning.
After reviewing many alternatives, the bipartisan, Congressionally created commission concluded that “the most viable approach to efficiently fund federal investment in surface transportation in the medium to long run will be a user charge system based more directly on miles driven . . . rather than indirectly on fuel consumed.”
Charging vehicle drivers a mileage fee embodies the “user pays” principle and more accurately aligns the costs and benefits of the surface transportation system to those who are using it, wrote the commission. More transparent charges for using infrastructure may also spur drivers to use the system more efficiently, reducing the overall investment need.
“With the expected shift to more fuel efficient vehicles,” said Robert Atkinson, chair of the financing commission and president of the Information Technology and Innovation Foundation, “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.”
President Barack Obama flatly rejected the idea of taxing motorists based on how many miles they drive. In response to Transportation Secretary Ray LaHood’s comment to the Associated Press a few days ago that the country should look into a mileage-based tax, the AP reported, White House Press Secretary Robert Gibbs told reporters, “It is not and will not be the policy of the Obama administration.”
In addition to a federal mileage-based charge, the financing commission called for increasing the federal fuel tax by 10¢/gal for gasoline and 15¢/gal for diesel and indexing those rates to inflation to meet the immediate needs of the federal-aid highway sytem. The commission also recommended the federal government facilitate state and local governments’ ability to raise their share of needed revenues in ways that also spur efficient use of the system and stepped-up investment, including through tolling portions of roads and charging premiums for rush-hour travel in heavily used urban corridors, called congestion pricing.
The gas tax, which is not currently indexed to inflation, has lost a third of its purchasing power since 1993, the last time the tax was increased.
The financing commission urged the federal government to act swiftly. While the nearly $40 billion in transportation infrastructure spending included in the stimulus package will be helpful, it will cover only a very small share of the shortfall in highway and transit funding and will not address the systemic crisis the nation faces in its surface transportation infrastructure investment.
Culminating nearly two years of study and deliberation, the financing commission’s final report is titled “Paying Our Way: A New Framework for Transportation Finance.”
For more information on the financing commission, visit: http://financecommission.dot.gov.
