• Apr 27, 2007

From this article, "U.S. Transportation Secretary Mary Peters says that the federal highway trust fund will lack sufficient funding from taxes beginning in 2009. She has been pressing states to look for alternatives to gasoline taxes. 'The bottom line is that we are spending more than we take in, and we have nearly run through the balances that had built up in the fund,' Ms. Peters told Congress in February. 'The highway funding problem is not going to go away, nor can we put it off until the last minute.' The highway-fund shortage could be exacerbated if Congress raises fuel-economy standards to curb pollution and reduce reliance on foreign oil. Cars with higher fuel economy can travel longer without refueling."

Basically, what is happening is that states are trying to figure out a way to make more money in an effort to keep up their existing roads and to continue to expand on what is already there. The worry is that as cars get more fuel efficient, less money will come in from the gas tax. One potential solution that Oregon and other states are considering is to track the amount of miles a vehicle is driven and tax the vehicle on those miles, not on the amount of gasoline used to refill the tank. While that seems to make a certain amount of sense, opponents to this plan are concerned that consumers will be less inclined to purchase fuel efficient vehicles if it costs less to fill them up, as it would if the gas tax were dropped altogether, as it would under the mileage-based option. Perhaps instead, we should raise the gas tax? Any takers on this one? Here is one! And below you'll find a post with some other ideas about the highway system in America.

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[Source: The Wall Street Journal]



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