Sunday, June 9, 2013

National Op Ed: Transportation Funding

Transportation funding is a nationwide mess; there is no getting around it.  Federal and state funding has been drying up across the country gradually for several decades as inflation has risen and the gas tax has remained stagnant since the 1990’s.  Fortunately, this is partially due to the nation’s fleet becoming more fuel efficient and partially to overall driving slowly declining.  Unfortunately, the gas tax is the primary source of revenue for transportation infrastructure maintenance, enhancement and expansion. 
In order to maintain a certain standard of road conditions and to expand alternative transportation options revenues must be levied.  To do so, I strongly suggest that a new user fee be implemented.   While the type of user fee that will be most effective and equitable has yet to be determined, I urge further outcomes focused attention in this area.  If a change in revenue collection does not take place soon, transportation systems across the nation will be put in precarious, even dire, financial situations.
Oregon implemented the first gas tax in the nation’s history in 1919.  The federal gas tax was later created in 1932.  Since then the gas tax has become the single most important source of revenue for state and federal transportation funding across the country.[1]  Congress has raised the gas tax several times in the last seven decades, but has chosen to allow the tax to plateau at the 1993 level of 18.4 cents.[2]  Very few states have taken the initiative to raise their own state gas tax since then, and none to levels that are congruent with the current level of inflation.[3]  Recently, total gas tax revenues have plateaued, and when adjusted for inflation revenues have actually declined since their peak in the 1960’s.[4]  This trend will continue if electric vehicle goals are met.[5]  If the gas tax declines further, more and more frequent withdrawals will need to be taken from the state and federal governments’ general funds, which have been propping up transportation funds for a number of years due to shortfalls.

Figure 1 Federal Gas Tax[6]

This is due to less and less dedicated funding for transportation, and especially funding dedicated for mass transit options.  This is taking place at the same time there is a large push for expansion of alternative transit options, including bike and pedestrian options as well as mass transit.  This begs the question of where the funding for this additional infrastructure is going to be drawn from.  Additionally, the decline in vehicle miles has serious benefits related to both public health and the environment.  As many cities and regions attempt to meet state mandated air quality regulations, less driving is to be encouraged.  The battle against the nationwide obesity epidemic has also utilized active transportation and less driving as a health improvement tactic.  In the current situation, however, better air quality and health policies are at odds with transportation funding policy.  As Hajimari and Wachs note “as long as the motor fuel tax is the principal source of transportation program revenues, there exists an incentive to increase fuel consumption.”[7]  These conflicting policies must be resolved, or neither objective will be reached.
A new user fee that does not rely on gas consumption would create a new type of revenue source.  There are several different ways to implement user fees, and several different user groups that need to be assessed.  Currently, I have no panacea user fee solution, but this type of taxation seems like the only logical next step, so why hasn’t more outcomes focused work been done in this field?  Several pilots have taken place in metropolitan areas, including Portland, but nothing, not even slight policy changes, has come of it.  The pilot done here involved the vehicle miles traveled (VMT) user fee.  This type of fee, though potentially effective, has an exceptionally expensive rollout and needs a great deal more work to make it equitable to all drivers.  Additionally, it views transportation infrastructure users in a very narrow scope.  I recommend research driven by a more holistic perspective.  Drivers of all types of vehicles need to be financially invested in maintaining the infrastructure they utilize, but vehicular drivers are not the only transportation infrastructure users.  Bicyclists and mass transit riders must also contribute to overall transportation funding.  This type of fee system would also require that the resulting funds be split more evenly between modes.
Road user fees, however, require finesse.  Care must be taken to ensure that such fees do not send a discouraging message to the very bicyclists and electric vehicle owners whose populations must expand to meet environmental and health goals.  The system must change; both to bring political policies back into accord and to maintain adequate funding, but it must change carefully.  Individual states must be allowed to try their own version of a user fee to replace the gas tax, but federal encouragement, including some funding for piloting and research, will be key.  If transportation funding is to be pulled up to the necessary levels, changes must take place nationwide.


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