“…that fuel consumption and fuel tax revenue could be depressed by changes in automotive technology, rising fuel prices, or new energy or environmental regulations and that the user fee finance principle that has been the basis of highway finance may be eroding in practice, as nonhighway applications of user fee revenues proliferate and dependence on revenue from sources other than user fees grows. The US Transportation Research Board’s Committee for the Study of the Long-Term Viability of Fuel Taxes for Transportation Finance identified three major threats to continued reliance on motor fuel taxes. There is no single policy or technology that can achieve energy security and reduce greenhouse gases to sustainable levels (Greene et al., 2009, Greene and Plotkin, 2010) but here we demonstrate a logical reform of the motor fuel tax that can produce a sustainable, low-cost method of financing the major part of surface transportation while encouraging energy efficiency and greenhouse gas emission mitigation. The rest of the funds to pay for roadways come from state motor fuel taxes, property taxes, tolls, sales taxes, other taxes and fees and from bond issues, investment income and other sources.Īt the same time, highway vehicles generate 25% of US CO 2 emissions and account for over 70% of its petroleum consumption (US Department of Energy, Energy Information Administration, 2010). In 2008, $7 billion was transferred into the Highway Trust Fund from the General Fund. Historically, approximately 90% of federal Highway Trust Fund Revenues came from the federal motor fuel excise tax. Some 52% of the revenue to fund public roads comes from fees levied on highway users, 90% of which is derived from motor fuel and vehicle taxes. In particular, erosion of the motor fuel tax by inflation, increasing fuel economy and substitution of alternative sources of energy for petroleum fuels is considered the most serious threat. The viability of current methods of paying for this massive public enterprise is thought in doubt. In 2008, federal, state and local governments spent over $200 billion building, maintaining and operating the nation’s 4 million miles of public roads. Highways annually support nearly 5 trillion passenger miles of travel and 1.4 trillion ton-miles of truck freight movements in the US. An indexed energy user fee cannot adequately address the problems of traffic congestion and heavy vehicle cost responsibility but it could be a component of a system of financing surface transportation that would eventually also include time and place specific monitoring of miles traveled for congestion pricing, externality charges and heavy vehicle user fees. However, it is not a substitute for pricing greenhouse gas emissions and would make only a small but useful contribution to reducing petroleum dependence. An indexed roadway user toll on energy would induce two to four times as much reduction in greenhouse gas emissions and petroleum use as a pure mileage fee. A miles traveled user fee, however, does not encourage energy efficiency in vehicle design, purchase and operation, as would a user fee levied on all forms of commercial energy used for transportation and indexed to the average efficiency of vehicles on the road. Charging highway users per mile has been proposed as a replacement for the US motor fuel tax.
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