Expert: Kill Gasoline Taxes for Highway Upkeep

Reliance on gasoline taxes to fund U.S. highway repairs and improvements is outdated and should be replaced with a miles-traveled tax, a transportation expert asserts.

Several problems with the gasoline tax have developed in recent years, according to Robert Poole, director of transportation policy and Searle Freedom Trust Transportation Fellow at the Reason Foundation, who has advised the Ronald Reagan, George H.W. Bush, Bill Clinton, and George W. Bush administrations.

First, the gas tax is based on gallons of fuel consumed, and the average miles-per-gallon of vehicles has doubled over the past two decades. So drivers now travel twice as far on a gallon of gas, but highways still need at least as much maintenance as in previous years.

Second, federal policy promotes alternatives to gasoline-powered vehicles, including hybrids and all-electric cars, so a growing percentage of vehicles on the road will be paying little or nothing toward the cost of maintaining the roads they use.

Third, gasoline taxes are not indexed for inflation. The federal tax of 18.4 percent a gallon hasn’t been raised in nearly two decades, and more than half of the states have not raised their gasoline tax this millennium.

The result: “Gasoline taxes no longer provide enough money to pay for roads and bridges — especially when Congress and many state legislatures are reluctant to increase taxes imposed on each gallon,” USA Today observed.

A worthy alternative to gasoline taxes would be a miles-traveled tax, which would have drivers pay according to how much they use the nation’s roadways rather than how much gas they burn — an approach made feasible by recent technological gains in collecting tolls.

Another problem with gasoline taxes, Poole points out: Everyone pays the same rate per gallon, whether they drive on country roads and neighborhood streets that are inexpensive to build and maintain or on multibillion-dollar highways.

“A system of per-mile charges could be tied to specific highways (as tolls are today), so that those who use mega-project highways would pay accordingly,” Poole writes.

Minnesota and Oregon are already testing technology to keep track of drivers’ mileage. The greatest obstacle to a miles-traveled tax has been privacy concerns, USA Today reported — in an Oregon pilot program, motorists objected to the in-vehicle boxes used to track miles driven.

Those concerns could be circumvented by allowing motorists who don’t want to use the technology to instead buy an unlimited number of miles with a flat annual tax.

“Replacing fuel taxes is not just about ensuring adequate, sustainable funding for the highways we all depend on,” Poole concludes.

“It is also the key to transforming what is now a poorly managed, non-priced, government-run system into a 21st-century network utility.”