Raising the federal fuel tax won’t adequately and fairly pay for future roadway infrastructure needs, argues a new Competitive Enterprise Institute report released today.
“Our Interstate Highway System is crucial to promoting commerce and Americans’ quality of life, and lawmakers must decide how to direct $1 trillion in needed rehabilitation and enhancement of that system over the next two decades,” said Marc Scribner, CEI senior fellow and author of the report. “With rising vehicle fuel economy and declining fuel tax revenue per mile traveled, a new approach is needed to support roadway investments.”
Scribner also highlights the fact that motor fuel taxes are regressive, because lower-income Americans tend to drive older, less fuel-efficient vehicles and thus pay more to drive the same distances.
“Instead, Congress should eliminate barriers to state, local, and private investment, reevaluate what transportation infrastructure projects truly merit federal support, and transition away from per-gallon taxation toward per-mile road usage fees,” said Scribner.
The report urges Congress and the administration to support crucial reforms for the next federal surface transportation reauthorization, also known as the highway bill. The current law is set to expire at the end of September 2020. Specifically:
- Reconsider federal priorities: Continue funding highway freight corridors—major roadways used by heavy trucks—but stop funding roadways that are used mostly by state and local residents not engaged in interstate commerce.
- Change how roadways are funded: Instead of a federal fuel tax, switch to a system of mileage-based user fees whereby users are directly charged based on the distances (and perhaps weight of the vehicle) they drive.
- Promote local self-help: Give states increased procurement and operating flexibility by eliminating federal restrictions on tolling state-owned Interstate Highway System segments.
- Harness private investment: Empower states and localities to seek private partners by eliminating the $15 billion lifetime volume cap on private activity bonds used in surface transportation.
- Remove red tape: Take a hard look at procurement, labor, and environmental rules, and eliminate the policies that drive up costs and create delays for no or trivial public benefit.
View the report: Transforming Surface Transportation Reauthorization: A 21st Century Approach to Address America’s Greatest Infrastructure Challenge by Marc Scribner