CONGRESS NEEDS to raise the gasoline tax to help the states -- substantially, and the sooner the better. With the current oil glut, crude oil prices are plummeting. America's roads and bridges are deteriorating and use of our highways is increasing. Most importantly, the states and local communities primarily responsible for maintaining the roads are covering only a quarter of their transportation-related expenses of $60 billion a year from state and local gasoline taxes.

We can make up their $50 billion-a-year gap in three ways, but only one of them is fair. The other two are subsidies. We can continue borrowing money, through bond issues, to pay for roads. We can raise general revenue taxes to make up the shortfall. Or, we can raise the gasoline tax so that the people who use the roads pay for them and let the federal government distribute the proceeds to the states.

Rational economics and fairness demand that those who benefit, namely today's motorists, pay the cost -- rather than the next generation or the taxpayer, whose state excise and sales taxes, property and income taxes could be reduced if the highway burden were removed.

There's no question that now is the time

S. Fred Singer is a Visiting Eminent Scholar at George Mason University, on leave from the University of Virginia. to act. Timing is everything in politics; and with oil prices plunging, the impact of a stiff increase in the motor fuel user fee (gasoline tax) would be eased and less likely to produce an outcry.

The need for increased revenues is clear. The federal government now pays about $10 billion, out of a total of about $70 billion for the construction and maintenance of highways, bridges and tunnels, and for traffic enforcement and safety expenses. Yet the revenues raised by federal, state and local motor fuel taxes came only to $15 billion in 1981; after 1982 the federal tax increase brought in an extra $5 billion, enough to cover the federal share of expenses. State and local governments, however, were running a deficit of some $45 billion that had to be made up by general tax revenues and by bond issues.

This shortfall would increase considerably when one considers the added long-term costs of repairing or replacing bridges and other large-scale repair and maintenance projects. The secretary of transportation reported to Congress in July 1983 that these projects would cost about $320 billion. If worked off in 10 years, it would raise the cost to the states by some $30 billion per year.

One way of looking at this annual discrepancy of $50 billion to perhaps $80 billion, is to say that the motorist is getting a "free ride" on the nation's highways, at the expense of the average taxpayer (who may or may not drive) and of some future generation that will be forced to pay off the bonds. The situation is unfair to the poor (who drive less) and to the unborn (who certainly are not using today's highways). The inequity becomes even greater as doubts develop about the accepted wisdom -- namely that the next generation will be better off financially than the present one.

The United States is an automobile-oriented society. According to a recent Hertz Corporation study, cars on the road in 1984!totaled 125.7 million, slightly more than half a car per person. In 1984, cars and trucks racked up a record 1.5 trillion miles, using 113 billion gallons of fuel.

The federal role in the road transportation system has evolved since the Federal Aid Road Act of 1916 first established a structure for federal responsibility. Since about 1960 the federal tax had been 4 cents per gallon; it was finally increased to 9 cents in the 1982 Surface Transportation Assistance Act.

State taxes vary greatly, with a high of 16 cents per gallon in Minnesota to a low of 5 cents in Texas, as of 1983. The average state tax increased only slightly since 1970, from 7 cents to 8.2 cents in 1980, but more sharply since 1980 to about 11 cents in 1983. Even so, this increase is low; motor fuel taxes were 18.5 percent of all taxes collected by the states in 1960, and only 6.4 percent by 1982.

Local taxes, where permitted, vary greatly, and are imposed by counties, cities, or regions. For example, the Northern Virginia Transportation District has a 2 percent retail tax for the funding of the Metro bus and subway system.

Even though the financial needs are at the state and local level, local politicians may not be willing to take the heat to raise their motor fuel tax by, say, 50 to 75 cents -- even if done in increments of 10 to 15 cents over the next five years. In addition there is the vexing but real boundary problem. The District of Columbia could not raise its tax without losing revenue to Maryland and Virginia. New York City loses substantial revenues to New Jersey.

One way out is a federally-collected tax, presumably uniform, that is then refunded directly to state treasuries. (This tax could be phased in to match the falling real price of motor fuels.) At the same time, the federal government could reduce a variety of subsidies and other payments to the states, to satisfy at least partially the stringencies of the Gramm-Rudman-Hollings law.

Such a federally-collected tax would not preempt a state motor fuel fee that could be raised, or kept or even abolished. Because typical driving distances vary greatly, for example between eastern and western states, some western states will collect more revenues per-capita. But then, sparsely populated western states also have higher per-capita road costs.

Raising the tax would also be a fair and equitable way of maintaining the conservation habits we've developed in the past 12 years. Keeping the price up by raising the gasoline tax would inhibit gasoline consumption without unfairly taxing -- by means of the increased oil import fee some have proposed -- homeowners and others who use heating oil.

We've come to recognize that higher prices are an effective way to achieve conservation goals, better than exhortation and less coercive than laws and regulations. Since reaching a peak of $36 a barrel in 1980, world oil prices have fallen by 50 percent (and even more in real terms, taking account also that 1986 dollars are worth only 70 cents in terms of 1980 dollars) making a motor fuel user fee less painful. With higher motor fuel prices, people will want to buy fuel-efficient cars, and Detroit will want to build them. Yet such a motor fuel tax is fairer to the poor than other consumer taxes: sales tax, value-added tax, or general energy tax.

A reduction in the use of oil will also have substantial security benefits. Cheers will be heard from those who want to reduce oil imports and who are concerned about the adverse trade balance of the United States. Reducing oil imports will also put pressure on OPEC to lower the world oil price further. For example, a 50-cents-per-gallon tax would reduce oil use by about 10 percent and imports by perhaps 1.5 million barrels per day -- which is about 30 percent of current U.S. imports and about 10 percent of current OPEC production.

A reduction in driving will have additional benefits that are harder to quantify: fewer lives lost, fewer working days lost because of accidents; less time lost in traffic congestion, to name but a few. According to my calculations, a 10 percent reduction in accidents would save society about $20 billion per year; congestion losses would be cut by $40 billion annually if commuting time were reduced by only five minutes daily.

A variety of reasons can be given for raising the gasoline tax -- safety, conservation, security, economy -- but the main argument remains the user-fee aspect. One might argue that tolls for roads, bridges and tunnels are a fairer way to charge for their use; but toll facilities are expensive to install and complex to administer. Until an advanced electronic billing method comes along that records the route taken by each car, motor fuel user fees may be the most effective method to pay for a road transportation system.