Increased Fuel Efficiency Wreaks Havoc On Highway Trust Fund

As vehicles become more fuel efficient, their drivers pay less in fuel excise taxes, the main source of road funding. Fuel efficiency will likely increase as a global warming reduction strategy, while fuel excise taxes remain largely stagnant.

"Two decades ago, passenger cars got an average of about 14 miles per gallon, according to the Department of Transportation. Now that number is 17 mpg -- in part because people are trading in older cars for new ones with greater fuel-efficiency. The number would be higher had the fuel economy of vans, pickup trucks and SUVs improved, but it has stayed about the same at just over 16 mpg."

"The bulk of highway and road funding, about 55%, comes from a combination of state and federal gasoline taxes. The rest generally comes from vehicle registrations, drivers' license fees, bonds and other public borrowing."

"U.S. Transportation Secretary Mary Peters says that the federal highway trust fund will lack sufficient funding from taxes beginning in 2009. She has been pressing states to look for alternatives to gasoline taxes."

"'The bottom line is that we are spending more than we take in, and we have nearly run through the balances that had built up in the fund,' Ms. Peters told Congress in February. 'The highway funding problem is not going to go away, nor can we put it off until the last minute.'"

"The highway-fund shortage could be exacerbated if Congress raises fuel-economy standards to curb pollution and reduce reliance on foreign oil."

[Editor's note: Although this article is only available to WSJ subscribers, it is available to Planetizen readers for free through the link below for a period of seven days.]

Thanks to MTC-ABAG library

Full Story: Fuel-Efficient Cars Dent States' Road Budgets



Seems pretty obvious to me

Seems pretty obvious to me that they should increase the gasoline excise tax rate as fuel efficiency increases. This would keep the highway trust fund coffers full while at the same time encourage drivers to find alternate means of transportation.

Ummm, what about raising the gas tax?

If increased fuel efficiency is lowering revenues, wouldn't raising the gas tax be a simpler solution than looking for other revenue sources?

Of course, higher gas taxes might encourage yet more fuel efficiency, leading to future rate hikes, and so on...not a bad outcome if you think air pollution, global warming, and oil depletion are things to be worried about.

Ken Bowers, AICP, PP

Painfully Antique Thinking

Typical (and painfully antique) responses to “Increased Fuel Efficiency Wreaks Havoc on Highway Trust Fund” include:
• Raise gas taxes, indexed to inflation, more tax per gallon does not mean paying more tax per year.
• Take the Oregon approach with technology for drivers to pay 1.25 cents per mile when they are buying gas.
• Convert and build new tolls roads.
• Doesn’t bother me, I take transit everywhere and buy only local products.
• Wait for the National Surface Transportation Policy and Revenue Study Commission., whose report is due in December 2007.

Unfortunately, the National Surface Transportation Policy and Revenue Study Commission is mostly focused on the wrong issue, how to collect more revenue. They don’t appear to be recognizing the potential for electronics to do more with less in a really big way.

As one of many examples – Auto manufacturers are deploying automation technology (fully drive-by-wire stability control systems, adaptive cruise control, General Motors’ V2V). Congestion relieving vehicles will be available before 2030. The April Scientific American explains stability control systems. The May issue of Popular Science, has a good description of the DARPA Urban Challenge vehicles. Note the civilian applications can happen much faster by having the vehicles and road features communicating locations and accelerations. On page 66, Seth Teller, MIT faculty adviser, points out, “If cars are communicating, no one has to idle at a light for three minutes again.” Jacob Peters, University of California at Davis notes that “Active safety technology that makes cars drive closer together would easily double (road) capacity.”

Planners cannot prevent the doubling of road capacity! (Is that sustainability without development?) The National Highway Traffic Safety Administration will make the basic component, $111/vehicle stability control systems, mandatory in 2012 vehicles. (The systems provide life-saving safety benefits between air bags and seat belts.) The best Planners can do is to plan for the smooth introduction of electronics. I suggest the best way to accomplish that is by imitating the DARPA Urban Challenge, but with the vehicles communicating with each other, trains, bicyclists, pedestrians, highway workers, potential ride-sharers, parking spots, and the road.

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