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Andrew
Guest
Gas Tax Revenues are down due to the recent Recession and more Americans driving hybrid cars, etc.
Isn't it time for the United States to raise the Gas Tax?
Isn't it time for the United States to raise the Gas Tax?
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the_traveler
Engineer
It's very strange to hear someone say that.
If the governor or president said that, he/she would hear calls for impeachment!
etc...
If the governor or president said that, he/she would hear calls for impeachment!
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Ryan
Court Jester
It's not strange, it's perfectly logical.
Revenues from the gas tax are desperately needed to build and maintain our roads. Unfortunately, because the Federal gas tax hasn't been raised in over 20 years and isn't indexed to inflation (and is a flat rate, not a percentage of the gas price), combined with less fuel being used (both from increased fuel economy and decreasing vehicle miles travelled), means the money just isn't there.
We would need $1.61 in gas tax revenue today to purchase the same amount of stuff that $1.00 would have purchased in 1993 when the gas tax rate was last reset.
Revenues from the gas tax are desperately needed to build and maintain our roads. Unfortunately, because the Federal gas tax hasn't been raised in over 20 years and isn't indexed to inflation (and is a flat rate, not a percentage of the gas price), combined with less fuel being used (both from increased fuel economy and decreasing vehicle miles travelled), means the money just isn't there.
We would need $1.61 in gas tax revenue today to purchase the same amount of stuff that $1.00 would have purchased in 1993 when the gas tax rate was last reset.
Yes. The federal excise tax of 18.3 cents/gallon on gasoline has not changed since 1993. Construction costs have gone up a wee bit since then. The Highway Trust Fund (HTF) is about to run out of money later this year, which may finally force Congress to step up and either raise the excise tax, switch to a wholesale tax on gas component, or find other sources of revenue. The problem is that even an adjustment only for inflation since 1993 in the gas excise tax would cause some to go nuts.
On the other hand, VA, MD, PA, MA, Wyoming are among the states that either raised gas taxes or other taxes in 2013 to pay for transportation and infrastructure needs. So it should not be impossible.
The pending depletion of the HTF and the renewals of the transportation bill and Amtrak reauthorization will be the topic of much discussion and debate on Capitol Hill over the next 6 months. This is why Boardman is calling for a Transportation Trust Fund to replace the HTF so Amtrak can get steady funding from the trust fund rather than be totally dependent on varying annual funding from Congress.
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Andrew
Guest
Wouldn't this Trust Fund last 6 years under Amtrak's proposal?
The HTF has run out of money every year since 2008 and has required an infusion of funds from the General fund to remain solvent. It has to a large extent become one of the bigger Third Rails around; no one wants to touch it for fear of being electrocuted, which in politics means being voted out.
cirdan
Engineer
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I've often wondered what will happen once (if?) electric cars start gaining a meaningful market share.
Will an extra electricity tax be introduced to match the gas tax and make sure electric cars also contribute their part to the roads they use?
If you only charge cars at special charging stations, that would be easy. But with people able to charge at home, not so, unless you want to make all electricity more expensive, which would be counter productive and massively hurt industry and manufacturing.
Or will it be time to move away from gas tax and finance roads by road pricing such as charging people to drive into cities (as is done in London) plus converting existing freeways into turnpikes?
That might work for big highways and big cities. But small towns and little roads wouldn't be able to do that, or if they did, they wouldn't collect much revenue (yet costs of collection would be high). Yet these roads also need investment and money.
Besides which, any such proposal would be met with massive opposition and probably never get implemented.
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Ryan
Court Jester
Eventually I think that we're going to have to go to a vehicle miles traveled tax.
States with annual inspections can just read the odometer every year at the inspection and charge accordingly.
States without them may have to implement them (or at least annual odometer readings).
States with annual inspections can just read the odometer every year at the inspection and charge accordingly.
States without them may have to implement them (or at least annual odometer readings).
cirdan
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That would be one approach, but it might disprportioantely hurt people in rural areas who
1) need to driver more and further all the time to get to work, shop etc
2) don't have ready access to alternatives such as public transportation
3) benefit disproprtionately little from that revenue as most of the cash goes into big highway projects within or between big cities. Very little gets spent on fixing up little rural roads.
So effectively those who would contribute the most would get back the least.
Ryan
Court Jester
That sounds completely backwards. People that drive further and more frequently should pay more than those who take shorter trips and take advantage of public transit.
Under today's system they still wind up paying more anyways. It's slightly less drastic as most vehicles get better highway gas mileage than city, but they still pay more.
I'd also need to see some hard figures in terms of rural areas getting very little in return. Yes, mega-projects get done in the big cities, but they also have a lot more vehicle miles per mile of road, so more money will need to be spent there. Hopefully, though, some of that money will be allocated on the state level to help pay for county/township roads, which would not directly get any benefit from the increased tax (as aside from any cost-sharing with the state or federal government, those roads are paid by property taxes, not gas tax.) I don't know how vital those roads are in the city, but out in the country those roads are vital towards having a strong road infrastructure.
Once you get out into rural areas, the amount of infrastructure they actually have (paved roads with constant maintenance, municipal water/sewerage hooked up to indoor plumbing, etc.) tends to be quite low. But if they are making frequent, longer trips into town using those improved roads, then they are using the infrastructure and thus should pay for it.
There's no perfect way of setting up a fee structure that's 100% fair. The "most fair" from a fee perspective would be tolls, but that would either be impractical (toll booths every few feet), or be unacceptably invasive of one's privacy (tracking devices on people's cars that show where you've been and every road you've taken; this is different from the transponders that only check you at certain points on the highway because it's easy enough to avoid something like that).
The gas tax isn't going to work for vehicles that don't use gasoline/diesel fuel. Those vehicles may not contribute as much to air pollution, but they certainly do contribute to infrastructure needs.
I figure the best fee structure currently practical would be a combination of gas tax (mainly to curb pollution/discourage burning of fossil fuels when not needed), VMT (obviously adjusted for the weight of a vehicle, which would cover the maintenance of the roadways), and tolls/congestion charges in certain areas to discourage driving in the busiest areas.
If you wanted to dedicate the funding, the gas tax could go to clean energy research, VMT would go to infrastructure maintenance, and congestion charges would go to public transit investment. Not that I'm expecting any of this to be feasible in the current political climate.
There's no perfect way of setting up a fee structure that's 100% fair. The "most fair" from a fee perspective would be tolls, but that would either be impractical (toll booths every few feet), or be unacceptably invasive of one's privacy (tracking devices on people's cars that show where you've been and every road you've taken; this is different from the transponders that only check you at certain points on the highway because it's easy enough to avoid something like that).
The gas tax isn't going to work for vehicles that don't use gasoline/diesel fuel. Those vehicles may not contribute as much to air pollution, but they certainly do contribute to infrastructure needs.
I figure the best fee structure currently practical would be a combination of gas tax (mainly to curb pollution/discourage burning of fossil fuels when not needed), VMT (obviously adjusted for the weight of a vehicle, which would cover the maintenance of the roadways), and tolls/congestion charges in certain areas to discourage driving in the busiest areas.
If you wanted to dedicate the funding, the gas tax could go to clean energy research, VMT would go to infrastructure maintenance, and congestion charges would go to public transit investment. Not that I'm expecting any of this to be feasible in the current political climate.
Michigan's take on hybrid/electric vehicles:
http://insideevs.com/michigans-road-use-feetax-on-hybrid-and-electric-vehicles-now-hotly-debated-topic-in-house-transportation-committee/
I looked up Michigan House Bill 4632, but I can't tell if it's gone to a vote yet:
http://www.legislature.mi.gov/(S(w4xofc455jzkrw45r2tdfx45))/mileg.aspx?page=GetObject&objectname=2013-HB-4632
http://insideevs.com/michigans-road-use-feetax-on-hybrid-and-electric-vehicles-now-hotly-debated-topic-in-house-transportation-committee/
I looked up Michigan House Bill 4632, but I can't tell if it's gone to a vote yet:
http://www.legislature.mi.gov/(S(w4xofc455jzkrw45r2tdfx45))/mileg.aspx?page=GetObject&objectname=2013-HB-4632
The Texas DOT did a study a few years back and found that Freeways within cities came closer to covering their costs via fuel taxes. They still fell short, but it was the rural areas that got the biggest subsidies to keep those highways going.
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Andrew
Guest
If Republicans refuse to increase subsidies for mass transit, then they will have a very hard time beating Clinton in 2016...
Ryan
Court Jester
There's approximately 3,674 issues that will influence the outcome of the election more than their stance on mass transit subsidies.
cirdan
Engineer
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I think big cities should do what London has done and introduce a congestion charge. Anybody who takes their vehicle within a certain area has to pay. Enforcement is by automatic cameras that recognise the vehicle's registration plates and cross check with a database to see if they've payed (and you can pay online). The bigger the city, the better public transit and thus the less need there is to drive. So nobody is being unfairly forced into this system. Excemptions apply for registered taxis, buses and I think certain classes of delivery vehicles.
jis
Permanent Way Inspector
Staff member
Administator
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Yup, as far as critical factor in election goes, mass transit subsidy falls basically in the background noise category.
Ryan
Court Jester
Agree completely that a combination of the three is going to be the best solution.
Green Maned Lion
Engineer
If Republicans refuse to increase subsidies for mass transit, 98.5% of voters won't notice! and of the ones that notice, 95% won't even care. Don't ever make the mistake of thinking, however significant this issue is to you- or me for that matter- that anyone else gives a crap. Very few people are actually anti transit. Most simply don't care about it, and more than few are not even aware it exists. We are not moving forward until you and your ilk get this concept.
I was talking with Charlie about this, and there are some real issues that aren't considered. The biggest problem is likely to be sticker shock, since a VMT at $.10/mile (I'm basing this on tolls on, for example, the PA Turnpike, which are a bit higher...I think they hover in the $.11-.12 range) is going to give a lot of people an annual tab of $1200-1500 all at once. Even if they pay as much or more in gas tax revenue right now, it comes in little drips and is "hidden" in the price of gas.
I see that as being open to several kinds of fraud or gaming:
(1) Odometer tampering would likely become common, and it would be pretty hard to prove that the owner had done it. I'm actually reminded of the time that the odometer on my car jammed for around 2000 miles (the car was 20 years old and had some other issues). Granted, this is more of an issue for older cars, but that's still a lot of cars that are still on the road.
(2) Registration gaming. Let's assume that a state doesn't assess a VMT. Take Delaware, Vermont, Rhode Island, or New Hampshire as an example (since they're all smaller states...and since Delaware in particular loves playing games). If VMTs became common, my instinct would be to start up a company that would nominally own your car with you paying a large fee at the start and then permanently leasing the car from us under an agreement, enabling the car to remain registered in Delaware. There was a version of this sort of game with car rental agencies in the Northwest at one time. To be fair, if the VMT is uniformly assessed (i.e. at the federal level), this could be partly averted, but if states get into the game this seems almost inevitable. There may also be ways around any registration rules that would frustrate this (such as the car remaining a "rental" and the "rental" being nominally renewed repeatedly over short periods). Even if there were a 30-day rental limit, I can see someone being on their 100th 30-day rental.
(2a) A version of this also seems likely with car sharing. From what I've seen of some European car sharing groups, there are models that allow you to "let out" your car when you're not using it and get a share of the rental charges from that. This model also has another advantage in that you could probably "switch out" your car for another one in the system with some ease (likely for a transfer fee of some kind to allow new cars to be acquired). Basically, every 30 days you'd tell the agency whether you wanted to keep your current car or swap it out for one in the system.
(3) Cars going illegitimate. Considering that I suspect there are a lot of judges who won't want to clog up local jails with offenders over vehicle registrations (and considering how many drivers are uninsured), risking a fine of several hundred dollars for driving a vehicle with an expired inspection sticker to avoid a tax bill of several thousand may be a calculated risk (and, because of the attendant safety issues, become a very serious problem).
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Someone who drives 12,000 miles a year and gets an average of 20mpg pays $108 a year in federal gas tax and more or less the same in state gas tax. A fee of $0.10 per mile - $1200 per year - would be about a 5x increase.
I would not use the PA Turnpike tolls as a guide to what a VMT rate might be as the revenue from the PA Turnpike is being used to pay for transportation and transit outside of the Turnpike. PA was stuck on raising the gas tax for so long that they kept jacking up the tolls on the PA Turnpike instead.
Your total possible VMT cost numbers are way high. The current federal excise tax is 18.4 cents/gallon on gasoline and 24.4 cents/gallon on diesel. 2.86 cents/gallon of the total goes to the Mass Transit fund.
So, for example, someone who drives their car 12,000 miles a year and gets 25 mpg buys 480 gallons of gas. If the state gas tax works out to 30 cents/gallon, they pay $88.32 in federal excise taxes and $144 to the state. If the average price was $3.50 a gallon, they paid $1680 for the gas. The state and federal gas taxes have become a pretty small proportion of the cost of gas.
There are many questions with how to collect VMT. Regardless of how it is implemented, it will cost money and take years to do. And yes if it is done on a state by state basis with a once or twice a year collection approach, some people will go to great lengths to get around paying the VMT tax.
The simplest solution in the near term is to raise the gas and diesel excise taxes. from what I have read, increasing the federal gas tax by 15 cents and the diesel tax by 20 cents and then indexing the rates to inflation will make the HTF solvent for the rest of the decade at least. It will cost little to implement as the collection system is already there. Double the Mass Transit Fund portion and allocate 1.5 cents/gallon to Amtrak and intercity passenger rail. Easy, right?
Over the next 10 years as cars get more fuel efficient and plug-in hybrids & electric cars become more common, the revenue from the gas tax will erode but a straight gas tax increase could give us 8-10 years to figure out how to replace it.
But even a serious push for a 15 cent a gallon gas tax increase will generate a storm of histrionic statements as to how the increase will destroy the American Way of Life, will bankrupt America, is part of a leftie plot to take away your cars, guns, and beer. They will say this, even as gas prices climb by 20 cents a gallon in a few weeks due to seasonal and market price fluctuations. Congress will probably punt and add money from the general revenue to the HTF to keep it barely solvent for another year.
RRUserious
OBS Chief
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How about a percentage for the first 1000 gallons and then another rate above 1000? Yeh, I can just imagine all the objections. But I don't think you can take away ALL incentive to conserve gas. And the big users are probably getting a lot more benefit from road maintenance.
Ryan
Court Jester
How exactly would one go about charging that?
