Record-high gas prices are reducing the amount of money available for Washington area transportation projects as leaders scramble to find ways to relieve the region's mounting traffic problems.
Highway projects are paid for primarily through a tax on every gallon of gas pumped. So as high prices compel some people to leave their SUVs and other vehicles in their garages and look for ways to cut back on the gas they use, less tax money is collected.
State officials said that effect is starting to be felt. In June and July, when prices started jumping and drivers started changing habits, total gas tax receipts dropped by nearly $1 million in Virginia compared with the same months last year.
The same was true in the District, where gas tax revenue dropped sharply in June, to a level nearly $1 million less than last year. June also was disappointing in Maryland, where taxes came in $1 million less than projected. Numbers for July from the District and Maryland were not yet available.
Maryland Transportation Secretary Robert L. Flanagan said he had no doubt the dip was brought on by high prices.
"There's no question that rising gasoline prices and flat revenues are a challenge," Flanagan said. "Maryland's economy is booming, and as a result, we expect to see more driving, not less driving. This does raise questions about our ability to rely on the gasoline tax."
Rising gas prices are the latest reminder to officials that the gas tax is no longer sufficient to finance transportation programs. "The gas tax is becoming almost inadequate as a principal source of highway funding," said Martin Wachs, a professor at the Institute of Transportation Studies at the University of California at Berkeley. Governments have "failed to increase the gas tax anywhere near what they need to maintain its spending power." Wachs noted that some localities are picking up the slack; 23 California counties have voted for sales taxes for transportation.
Gas and oil costs hurt transportation budgets in other ways, too. States must pay for fuel for their massive vehicle fleets, while construction prices have spiked because of contractors' transportation costs and because oil is a primary component of asphalt. Officials said the price of asphalt is up by nearly half, on top of already high prices for concrete, steel and other commodities.
As transportation departments "have to pay more to power their fleets and fill in tax revenues they're not getting, they're going to get caught in a terrible squeeze," said Lon Anderson, director of public and government affairs at AAA Mid-Atlantic. "Which either means taxes are going to have to be significantly increased, or they're going to cut back on projects.
"Given the reluctance to increase taxes, most likely they're going to get caught in a big squeeze and they're going to have to cut back."
This summer's high gas prices have accelerated efforts by transportation officials and lawmakers locally and across the nation to look for alternative ways to finance much-needed fixes.
Instead of relying on gas taxes to pay for infrastructure, leaders are increasingly talking about imposing tolls and partnering with private companies to build, maintain -- and profit from -- transportation projects.
"I think the fundamental problem is that the gas tax is just becoming less and less reliable," said Virginia House Speaker William J. Howell (R-Stafford), who has called for more private investment in road and rail projects. "Why continue to look at that as the primary way to fund transportation needs? We need to find another way."
Aside from public distaste for gas taxes, government support for them has eroded in recent years as they have failed to keep pace with growing needs. Even with the proliferation of gas-thirsty SUVs, overall fuel efficiency has improved. As a result, the tax hasn't kept up with population patterns or states' needs to build more and better roads.
Efforts to raise the tax have also stalled. Lawmakers in Virginia and Maryland debate increases almost annually, but proposals rarely make it out of committee.
Virginia last increased its tax, to 17.5 cents per gallon, in 1987, and the District and Maryland haven't raised their tax rates since 1992. Maryland charges 23.5 cents a gallon; the District's tax is 20 cents a gallon.
The federal government tacks on an 18.4-cent gas tax, which pays for much of its contribution to transportation projects. State officials said the amount they receive from the federal government could shrink if drivers look to conserve gas.
Anderson said research by AAA indicates that drivers will be doing just that. "I think there's every reason to believe that we'll continue to see prices going up at the pump, and I think we're certainly going to see more curtailment if the prices keep going up," he said.
A gallon of regular unleaded averaged $2.68 in the Washington region yesterday, compared with $2.34 a month ago and $1.88 a year ago.
In fiscal 2005, Virginia took in $890.6 million in gas taxes, and Maryland took in $752.7 million. The gas tax crunch is most dire in the District, where revenue has dropped sharply over the past five years. In fiscal 2000, the city took in $31.8 million in gas taxes, compared with $26.6 million in fiscal 2004. The city is on course for a similar amount through the first nine months of this fiscal year, officials said, although they added that gas tax revenue was holding steady only because of new service stations, allowing more people to fill up in the city.
"If trends continue in terms of gas tax receipts, we'll be broke in several years," said Dan Tangherlini, the District's director of transportation. "We'll be in a position where we have to lay off administrative staff or we wouldn't be able to match federal highway funds."
If that happens, the alternatives are to "do less projects or we go to the general fund with a tin cup," Tangherlini added.