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Paying for pavement.

Martin Wachs' "After the Motor Fuel Tax: Reshaping Transportation Financing" (Issues, Summer 2009) paints a clear picture of what ails the current U.S. system of revenue-raising that uses motor fuel taxes and other indirect user fees to fund roads and mass transit needs. The article also points to a new direction: pricing travel more fairly using a flexible approach that is based on vehicle-miles traveled (VMT).

The past two to three decades have dramatically exposed the weaknesses of the motor fuel tax: substantial gains in fuel economy, the development of hybrid and other alternative-fuel vehicles, and a concerted effort to reduce the United States' overreliance on fossil fuels. We now find ourselves in the questionable position of relying on taxing the very fuels whose consumption we are trying to curtail or eliminate. When we add the growth in truck VMT and overall travel and the eroding effects of inflation on a federal fuel tax that has not been raised in more than 20 years, it is not surprising that the Federal Highway Trust Fund has, and will continue to, experience deficits and require periodic infusions from the General Fund.

The Federal Highway Trust Fund, which is based on the motor fuel tax, was set up more than 50 years ago to ensure a dependable source of financing for the National System of Interstate and Defense Highways and the Federal Aid Highway Program. Given the shortcomings described above, we can conclude that the motor fuel tax is no longer a "dependable source of financing" for the transportation system.

What is the alternative? Recent commission reports and studies point to distance-based charges or VMT fees as the most promising mid- to long-term solution to replace the fuel tax. The use of direct VMT fees can overcome most, if not all, shortcomings of the fuel tax. Furthermore, because VMT fees relate directly to the amount of travel, rates can be made to vary so as to provide incentives to achieve policy objectives, including greater fuel economy and the use of alternative-fuel vehicles, which the current fuel tax encourages. In addition, however, rates could vary to include factors such as weight, level of emissions, and time-of-day charges. For example, Germany's national Toll Collect distance- and global positioning system (GPS)-based system for trucks varies the basic toll rate as a function of the number of axles and level of truck emission.

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Non-GPS technology is currently available that makes it possible to conduct a large-scale implementation of distance-based charges within two to five years. This approach would use a connection to the vehicle's onboard diagnostic port, installed in all vehicles since 1996, to obtain speed and time. An onboard device uses these inputs to calculate distance traveled and the appropriate charge, which are the only information that could be sent by the vehicle onboard unit to an office for billing purposes. This approach goes a long way toward addressing public concern about a potential invasion of privacy. (There is a widespread perception that a GPS-based VMT charging system "tracks" where a driver is. This is an unfortunate misconception.)

Given the crisis that road and transit funding is facing, we strongly endorse Wachs' "hope that Congress will accept the opportunity and begin specifying the architecture of a national system of direct user charges."

LEE MUNNICH

Director, State and Local Policy Program

FERROL ROBINSON

Research Fellow

Hubert H. Humphrey Institute of Public Affairs

University of Minnesota

Minneapolis, Minnesota

lmunnich@umn.edu
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Title Annotation:FORUM
Author:Munnich, Lee; Robinson, Ferrol
Publication:Issues in Science and Technology
Article Type:Letter to the editor
Date:Sep 22, 2009
Words:577
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