Increased Fuel Efficiency Wreaks Havoc On Highway Trust Fund

<p>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.</p>
April 26, 2007, 10am PDT | Irvin Dawid
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"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

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Published on Wednesday, April 25, 2007 in The Wall Street Journal
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