The Future of National Surface Transportation Policy

That was the title the U.S. Senate Committee on Commerce, Science & Transportation chose for a hearing on April 28. Panelists: Ray LaHood, DOT Secretary; Steve Heminger, MTC; Jame Corless, T4America; Ann Canby, STPP, and Ned Holmes, TX Transp. Comm.

Amongst the panelists, "there was a broad sense that the next surface transportation bill must reverse years of underinvestment in the nation's infrastructure."

They highlighted the "impending insolvency of the Highway Trust Fund, which uses money raised by the gas tax to pay for transit and roads projects."

"Nevertheless, Secretary of Transportation Ray LaHood reiterated the Obama administration's opposition to a promising funding solution -- raising the gas tax -- and obeyed the directive from up top to never again mention a tax on vehicle miles (VMT).

"LaHood focused on rethinking existing transportation priorities. He repeatedly described his intention to help communities become more transit-friendly, walkable and bikeable."

At around the same time, a very different story was unfolding in the House, where James Oberstar (D-MN), chairman of the Transportation and Infrastructure Committee, pushed for his preferred funding solution, a VMT tax."

"Why do we need a pilot program? Why don't we just phase it in?"

"This may mean that a VMT tax will be included in the first draft of the reauthorization bill.

Listen and watch Senate hearing [Tape begins @22:11]

Thanks to ClimatePlan

Full Story: We Need an Ambitious Transpo Bill. So How Are We Going to Pay for It



Why not raise the gas tax?

I'm puzzled -- the gas tax is meant to pay for the "Highway Trust Fund," but this fund is not adequate to meet the needs for highways. Why not raise the gas tax to meet this need plus raise an additional amount to pay for mass transit and services for human-powered mobility (pedestrian and bicycle services and support)?

What is the rationale for an artificially low gas tax?

People willingly paid more than $4 per gallon for gasoline a while back... Therefore, why not raise the gas tax so that the effective price of gas is at least $4 or $5/gallon?

Irvin Dawid's picture

"What is the rationale for an artificially low gas tax? "

John, everyone with half a brain must be asking that question.

Sadly, I think you'd have to ask a politician for the answer. But please don't just blame the President and Congress. When was the last time your state legislature raised the gas tax?

My own attempt at an answer, though, is that Obama boxed himself in when he promised "no increase in taxes for those making <$250,000. He should have distinguished 'taxes' from 'user fees', perhaps...?
Irvin Dawid, Palo Alto, CA

it makes too much sense

that is why politicians can't bring themslves to do it. It appears like Obama's plan is to raise taxes on those that didn't vote for him, more or less, but a gas tax increase would be unpopular for his base. States - same thing. We would rather tax unproductive things like income, capital gains, and profits instead of consumption, borrowing, and pollution. Sounds smart and reasonable, right? (Sarcasm intended).

Should We Spend More On Transportation?

There clearly is a good economic argument for raising the gas tax. If we don't raise the tax, gas consumption and prices will go up when the economy recovers, and the money from higher prices will go to the oil exporting nations. If we do raise the gas tax enough to keep consumption down, the money will go to our own government and can be rebated to us by lowering other taxes.

It definitely makes sense to tax the bads, not the goods - that is, to raise the gas tax and lower other taxes. But of course, that means that gas taxes would have to go into general funds and not be reserved for transportation.

I am dubious about the idea that we should raise gas taxes and spend all the revenuse on transportation. We have way overbuilt freeways in the last half century, because gas taxes were reserved for freeways (later extended to other forms of transportation). Since we have been spending too much on freeways, maybe we just need to take the money now spent on freeways and spend it on public transportation pedestrians instead.

At any rate, that will be the battle during this year's TEA reauthorization. The question will be how to divide the tax revenues between highways and transit. There will not raise the tax during a recession.

Charles Siegel

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