Funding an Efficient Transportation System

The Carbon Efficient City gives an excellent overview of strategies for improving the efficiency of regional mobility at the federal, state, and local levels—most of which I agree are steps in the right direction. However, one equally important strategy that wasn’t discussed is how we are funding and raising revenue to support transportation systems.

Gas taxes are currently the primary revenue source, for both states and the federal government, to fund transportation infrastructure projects. With increasing vehicle fuel efficiency and decreasing vehicle miles traveled (VMT), these funds are being rapidly depleted. In fact, for the past six years, the federal government has had to transfer money from the US Treasury’s general fund to the national Highway Trust Fund (intended to be fully-funded by gas tax revenue) to ensure timely delivery of project funding. There have been calls at both the state and federal levels to raise the gas tax, but this politically unpopular move is often criticized for subsidizing hybrid and electric vehicles for not paying their fair share of road funding.

To address these issues with a demand-based solution, several states are now investigating pay-per-mile road usage charges to collect transportation revenues. Such systems use electronic devices to tax drivers based on the number of miles they drive on public roads. Oregon is already planning to implement a voluntary road usage charge this year, which assesses a 1.5 cent per mile fee and issues a gas tax credit to participating drivers. This type of transportation revenue generator is an effective way to provide a sustainable road funding source that more states should begin to implement. If drivers are paying for the amount they are using public roads, we can ensure that the system is funded based on demand while also encouraging a reduction in VMT. Furthermore, road usage charges could be used to implement congestion pricing systems by charging drivers higher per mileage rates during peak hours, which would help to relieve congestion and increase system efficiency.

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