Bridge, Photo by flickr user Stop The Gears

There’s a lot of fun happening in the other Washington these days, but this is starting to get ridiculous: Congress doesn’t want to raise the gas tax in order to shore up transportation funding is instead looking at letting investment decline in transportation.

Congress may have to consider a smaller highway-funding bill than initially planned because of a steep drop in revenue from the federal gasoline tax, Senate Finance Committee Chairman Max Baucus said Thursday.

Lawmakers haven’t reached a consensus on how to plug the gap. President Barack Obama and leading lawmakers have rejected increasing the 18.4-cent federal tax on a gallon of gas.

Mr. Baucus said that without action, federal aid to states for highway projects would fall to about $28 billion a year from about $42 billion currently.

The gas tax funds not only highway projects, but transit and alternative transportation programs as well. The Obama administration put out a budget with a large transportation increase, which was nice but we knew would never happen. After that, House Budget committee chair Paul Ryan came out with one less than half as large. Now we’re considering cuts of 33% on an annual basis for the foreseeable future.

Reducing transportation investment would be a really sad affair, whether you support roads or transit. This is coming at a time when the “Report Card for Americas Infrastructure” gives the US’s infrastructure a D rating. Being hesitant to raise gas taxes at a time when prices are high and the economy is struggling through an anemic recovery might be good politics, but letting transportation investment decline would be terrible policy. Fortunately some alternatives exist and it’s possible to pay for transportation from the general fund. But it’s not obvious these alone will be enough to make up for so large a decrease in funding, much less the large infrastructure debt, assuming they even get through congress. Let’s hope it doesn’t come to decreased funding, after all, decline is a choice.

38 Replies to “No Gas Tax Increase, Less Infrastructure”

  1. It sure doesn’t sound like the Feds will be itching to close the $2 billion gap on the SR 520 project any time soon. Nor does this sound like a political environment in which WSDOT will get permission to toll all the lanes of I-90 and use 100% of those funds to expand a state highway, especially when that project actually adds congestion to I-5, which, incidentally, we can’t afford to repave.

    To me it sounds like we need to scale back some of our highway ambitions and do more with less, if for no other reason than we have no other feasible choice in the foreseeable future.

    1. Scaling back our highway ambitions does make sense.

      Gas is going to be permanently more expensive because supply is essentially fixed, and demand has increased dramatically due to the rapid increase in car ownership in China, India and other developing countries. There are more drivers competing for finite oil.

      If gas prices are permanently higher, then U.S. drivers are going to be driving less, and we don’t need new highway capacity. We do need to invest in transit infrastructure and service to allow people to move in more energy-efficient and also electric-powered transit. (I’m less a believer in electric cars because of the weight and toxicity of batteries – transit has the advantage of being able to use electricity via overhead wire systems – both electric trolley buses and trains.)

  2. America, the “can’t do” country!

    It’s not like anything has collapsed or killed anyone. Even when it did, it didn’t kill very many people. But what are the chances something like that could happen again?

    In any event, stop living in the past.

    1. To the best of my knowledge, NO Federal funding is going to the DBT.

      I don’t think the funding situation for SR520 is settled yet, but early tolling is a good start.

      We also should extend early tolling to the viaduct and to the Columbia River Crossing. If we can’t fund these projects out of the gas tax or available general funds, then the users should pay a larger share of the cost via tolling. Fair is fair.

    2. 520 bridge is much more important to both regional mobility and transit than the DBT. And DBT is only projected to have 40,000 vehicles/day, and less once tolls are factored in. Ditch the DBT.

  3. On the other hand, a decline in gas tax revenue means people are driving less :-)

    This is why funding transit with a gas tax (or any sort of car use tax) is a bit weird — successful transit/trip reduction program will automatically cut their own funding.

    1. Yes, people are driving less, but this means we need more transit, not an overall reduction in transportation investment and a massive reduction in investment in transit.

    2. While it’s true that VMT are declining, that’s not implied by the fact that gas tax revenues are declining. The latter is also impacted by people driving more efficient vehicles or using alternatively fueled vehicles.

  4. Meanwhile, in Seattle, non-arterial roads have seen proper care and attention over the last 15 years from the civic minded taxpayers of the area, as we all know that underfunding such an infrastructure would lead to huge future costs from the deferred maintenance.

      1. Much of BtG’s money went to Spokane and Mercer. Jeremy’s talking about non-arterial roads, which were unfunded long before BtG :) I suspect any future levy measure a la btG2 isn’t going to include non-arterial money either.

      2. Arterials carry most of the traffic at relatively higher speeds and longer distances, where pavement quality really matters, so they are rightfully prioritized before non-arterials.

  5. I thought the President captured the moment well. Do we picture ourselves as a nation that needs to accept a crumbling infrastructure? Is that our future, and is that the price we need to pay to continue lowering taxes on the 2% of Americans who have seen their wealth continue to grow through the downturn that’s causing the rest of us to lower our sights?

    Reality is that we won’t get out of the doldrums until we start investing, but there may be many years of pain before we realize it.

    1. I don’t understand the fascination with a VMT tax. The gas tax is a perfectly fine proxy for a VMT tax – except it has many advantages over a VMT tax. These include the fact that the infrastructure to collect the tax is already in place – whereas establishing a VMT tax will require a lot of technology, a new bureaucracy and likely a new government invasion of our privacy. Beyond that a VMT tax, if it is revenue neutral with a gas tax, effectively will subsidize people who drive large fuel-inefficient vehicles by shifting their tax burden onto people who a driving fuel-efficient vehicles. A gas tax, on the other hand, creates exactly the right incentives to encourage drivers to purchase and operate the most fuel-efficient vehicle for the job, which also minimizes pollution and greenhouse gas emissions, or at least to pay a penalty wheny they choose a bigger or less fuel efficient car.

      Please raise the gas tax instead of creating a VMT – especially if they are revenue neutral.

      1. The difference is that the VMT can easily differentiate between where and when the miles are travelled, whereas a gas tax can’t. That’s why you need the technology, and that’s the benefit you get.

        The gas tax subsidizes drivers who use freeways and bridges (expensive roads), and penalizes drivers who use poorly-maintained arterials. Any VMT that’s worth its while would correct that.

        You’re right that a gas tax helps to undistort incentives to drive fuel-inefficient vehicles, which is why I’m not proposing to get rid of the gas tax entirely. I just want a VMT tax as well.

      2. I am deathly afraid of the gov’t waste and poor contracting in implementing a VMT. For example, the 167 HOT lanes are operating at a net LOSS – the costs of the toll collection system are exceeding the revenue being generated. And look how the gov’t has bungled the 520 tolls so far. The web site is pathetic. They keep missing their target date for being able to collect the tolls.

        The potential is there for them to spend way too much to try to collect this tax.

        Plus to track where every mile is driven means that there is a 100% database of all your travel. I’m not supportive of any gov’t to have that level of information about the travels of its citizens.

    1. Thanks Oran! What I find most fascinating is the list of countries “above” US in the list. Although, I think the numbers are a bit skewed in not representing direct government subside because Iran has zero refinery capacity for gasoline; it’s 100% imported.

    2. If we don’t have the political will to increase the gas tax to the levels required to fully fund transportation, then we should at the very least stop subsidizing the oil producers.

      Oil production subsidizes cost this country billions, and I am loath to subsidize an industry with tax dollars when that same industry is racking in billions in profits. Take the billions we save and invest them in alternate fuels and/or transportation infrastructure.

      If you can’t raise gas taxes, at least eliminate the subsidies.

  6. I’ve said it before and I’ll say it again. We’re not spending too much on roads. We’re spending too little on transit. America’s infrastructure is already crumbling due to lack of investment, and this government seriously has its priorities wrong by cutting transportation investment, both road and rail.

    A gas tax increase is long overdue. Personally, I don’t support tolls because that requires a tolling infrastructure (which requires more money) AND it provides less flexibility. Having a gas tax, or a sales tax on gas, not only increases funding significantly, but it will also shift people to smaller and more fuel efficient cars, not to mention that it’s easier to be put in place.

    1. But not all highway miles are equal. It seems fair and logical to toll high cost corridors like “bridges” (I don’t really consider a bunch of barges rafted together a bridge) across Lake Washington.

    2. I think we might be spending too little on roads. Certainly too much on new mega-highways, but likely too little overall on roads. You’re right we’re spending far too little on transit. Depressingly little, and less all the time.

    3. I’m with Bernie on this one. User fees for roads strike me as far more flexible. Some roads are more expensive to build/maintain (e.g. arterials, freeways, bridges), and those can cost more. Some roads are more congested at certain times of day, and those can cost more at those times.

      Gas taxes are great at reducing gasoline consumption and pollution, but terrible at reducing congestion and VMT except by proxy.

  7. No Gas Tax Increase, Less Infrastructure………is that even true??

    is that necessarily so?? other taxes to continue infrastrucutre?? less gas tax less gas related infrastrucutre???

    would lower gas prices with no tax increase get more revenue??

    less infrastrucure more money out to….park maintenance??

  8. The basic mistake they made is right there in the tax: 18.4 cents. It should be a percent, not a cent tax. As fuel prices increase (and they will), it will cost more and more for a gallon of gas, dropping consumption and along with it tax revenue. Profits on fuel will be as high as ever, but we’ll lose the ability to even maintain our infrastructure*.

    If we had a percentage tax, then revenue would be mostly constant until fuel use really drops off – and that’s the perfect time to wrap up spending.

    * I’m not sure that’s the end of the world for highways, but we might as well start building alternatives to highways. Leaving money on the table instead of using it for rail is short-sighted.

    1. No, a percent tax is not the correct solution – your tax revenue shouldn’t be subject to the whims of market fluctuations (this is why a sales tax base system like we have in Washington is flawed), as it is difficult to properly plan for future needs. For example, the average national price of a gallon of gasoline has fluctuated over the past five years from a high of about $4.10 to a low of about $1.60 Link. Gasoline consumption is much more predictable.

      The gas tax instead should have been indexed to inflation. The 18.4 cents per gallon tax was established in 1993. To be equivalent to the 1993 tax level, today’s per-gallon tax would have to be about 28 cents. This would at least provide for a consistent, predictable revenue stream with consistent purchasing power from which to plan.

      1. The gas tax should be indexed for inflation, or instead, maybe we should set it up to increase by the greater of 10% or CPI each year for the next 20 years – so that the politicians don’t have to do anything to get it raised to a more reasonable level that will provide for transit infrastructure financing and maintenance of existing roads.

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