A great tax debate is breaking out in state capitals from Vermont to Texas: How do we maintain and expand our vital-but-aging networks of roads, bridges and urban transit systems?
For nearly a century, the nation has funded projects primarily with revenue from gasoline taxes. But the gasoline tax has lost value over the past decade. Changes in fuel-saving automotive technology and driving habits are resulting in less revenue to repair crumbling bridges, repave highways or upgrade buses and trains.
During the same time, many states have been loath to raise the tax. Sixteen states haven't raised gasoline taxes in 20 years or more, according to the Institute on Taxation and Economic Policy, a policy think tank.
So year after year, states have seen money for transportation slow to a trickle while critical transportation projects languished on engineers' drawing boards, the inventory of dilapidated and dangerous bridges swelled, and trains and buses got older and creakier.
The debate now is over whether the gas tax can be made sustainable with some fixes, whether other forms of taxation will pay for roads, or whether fees -- such as highway tolls and per-mile-traveled charges -- can fund transportation networks.
Virginia may dump gas tax
Nowhere is the debate more watched than in Virginia, where Gov. Bob McDonnell seeks to radically reform state transportation funding by repealing his state's 17.5-cents-a-gallon gas tax and replacing it with a transportation-targeted increase in the state sales tax.
McDonnell's press secretary, Jeff Caldwell, says the governor's "very novel approach" reflects his understanding that gasoline tax revenue will only continue to decline.
There are reasons for that. Since 2001, the number of miles driven per person has declined for every age group. People don't start driving until a later age. Many are turning to public transit, bicycling or walking. Since 2000, the number of bicycle commuters has increased 40% nationally, according to the National Conference of State Legislatures (NCSL).
And, Caldwell says, "If you raise the gas tax, it will inherently drive up the price of gas without addressing long-term the issue of declining (gas tax) revenue."
McDonnell's proposal, which would have to be approved by his state's Legislature, is drawing fire from many quarters.
"He's just substituting one tax for another," says Joshua Schank, president of the Eno Center for Transportation, a non-partisan think tank based in Washington, D.C.
"It's a very bad move because it discards the 'user pays' funding concept that we've had ever since the gas tax was first collected by Oregon in 1919," says Bob Poole, director of transportation policy at the Reason Foundation, a libertarian policy research group.
"It's fundamentally bad tax policy," says Carl Davis, senior analyst at the liberal-leaning Institute on Taxation and Economic Policy. "With the gas tax, if you drive more, you pay more in taxes. Or, if you drive a heavier vehicle that does more damage to the roads, you pay more. If you get rid of the gas tax entirely and rely on the sales tax, you are very literally giving drivers a free ride."
Virginia's proposal is "by and large unprecedented," says Jaime Rall, a transportation analyst at the NCSL. The nearest example she could think of was a Hawaii state Senate bill last year that would have increased the vehicle weight tax and repealed the state fuel tax. The measure failed.
Most Popular Stories
- Bipartisan Budget Deal Gets Key Support in House
- TFA Recruiting DACA Recipients
- Bitcoin Clones Lurch Onto Financial Scene
- Clinton to Keynote Annual Simmons Leadership Conference
- Scotch Whisky Sales Raise Distillers' Spirits
- Holiday Shopping Off to a Slow Start This Season
- Fake Deaf Interpreter Was Hallucinating, Has Schizophrenia
- Health Coverage Disparities Emerge Among States
- Podesta Likely to Reject Keystone XL
- Tea Party Glum in Face of Bipartisan Budget Deal