Many drivers gripe about the sorry condition of roads and bridges in the United States. They sometimes gripe even louder, knowing that they will likely have to dig into their pockets deeper to pay to fix them. But if they had to pick from several alternative ways to raise money for roads, a new study suggest drivers would prefer tolls instead of taxes.
That’s odd. I’d take the fuels tax any day — and especially instead of a new mileage tax.
The study — conducted by associate professor Denvil Duncan and others at Indiana University’s School of Public and Environmental Affairs — analyzed national data on drivers’ views of five possible revenue sources that could make up for declining fuel tax revenues. Thirty-four percent would go along with a greater reliance on tolls, while 29 percent would support raising fuel taxes, the researchers found. Twenty-one percent would support a new mileage fee, compared with 18 percent who would go for a higher retail tax. The least favored solution (13 percent) was raising income taxes.
The study – which was published June 21 in the Public Finance Review and flagged by Harvard’s Shorenstein Center on Media, Politics and Public Policy — comes as more and more states and the federal government scrounge for highway funds because the fuel tax has not kept up with inflation. Vehicles on the road these days are also more fuel efficient than they were two decades ago, and some of them don’t run on gas at all.
Several states, as well as the District of Columbia, have reckoned with this and raised their fuel taxes since 2010, according to the National Conference of State Legislatures. The nationwide combined state and federal average is now about 48 cents per gallon, according to the American Petroleum Institute.
The Indiana University study suggests that the public is not eager to pony up more money to pay for their roads and bridges, even though gas prices are relatively cheap and the relative tax haul at the pump is smaller than it was 20 years ago.
When President Herbert Hoover signed the first gas tax into law, the levy was one cent per gallon, and the average cost of a gallon of gas then was 10 cents, Forbes says. President Clinton signed off on the last increase in 1993 — to 18.4 cents a gallon — as part of plan to reduce the deficit when gas cost $1 a gallon. The revenues from the fuels tax go into the Highway Trust Fund, a portion of which also funds mass transit. The Highway Trust Fund has been laying out more than it’s been taking in for more than a decade now.
Part of the public’s coolness toward raising the fuels tax or creating a new mileage tax might be because raising money for roads doesn’t necessarily mean spending money on roads. Government officials at all levels have a sneaky way of saying they need to raise taxes for one thing and then spending those revenues on something else.
In Illinois, for example, the state’s 19-cent gas tax is supposed to be used exclusively for highway infrastructure; however, since 2003, the Illinois General Assembly has raided the special fund for highways and diverted about 25 percent of revenues to cover spending unrelated to transportation, according to the Illinois Road and Transportation Builders Association’s website. California has the highest gas tax in the country, and yet its highways are among the worst, according to a story in the Orange County Register.
That’s a reason many people doubt the wisdom of creating a whole new system to tax mileage. They worry it would become an add-on, not a substitute for the gas tax. It would be complicated. It would raise privacy concerns by handing the government another rationale for collecting data on people (though EZPass has not become a tool of Big Brother). It would have unintended consequences, such as imposing heavier burdens on people who invested in more fuel-efficient vehicles or lived in rural areas. The best you can say is that it might, rightfully, discourage people from pushing urban sprawl farther out.
So I don’t get how tolls would be better than just saying “uncle,” raising the fuels tax and then indexing that to inflation – especially if the government made sure the new money went only to highway infrastructure. The fuels tax is a reasonably fair, pay-as-you-go tax, and its collection method is in already in place. And it’s certainly preferable to a new mileage tax that would almost certainly be more complicated and give Uncle Sam an excuse to be more of a snoop than he already is