Will higher-MPG vehicles starve highway funding?

It happens every time there's a proposal on the table for increased fuel efficiency. Someone runs the math, points out that high mileage vehicles use less gasoline, then warns that less gas means less gas taxes for maintaining roads. In this case, that someone is Ben Wear over at the Statesman:

The gas tax has already lost about 50 percent of its purchasing power to inflation since the early 1990s. Now it would lose half of what's left to fuel efficiency. If you're scoring, that would mean TxDOT in 14 years could have, effectively, a quarter of what it was spending on Texas roads in 1990. Dodging potholes could become a sort of slalom sport.

Wear's solution is to index the tax to fuel efficiency, or to tax mileage rather than gasoline to avoid the "Obama gas tax cut."

The truth is that gas taxes already don't come close to paying for highway spending. At the federal level, fuel taxes and all other forms of "user fees" cover about half the cost of highway spending. In many states, it doesn't even do that. One big reason is that the taxes set on gasoline are not based on a percentage of the price, but are set as fixed amounts. Most sales taxes are in the form of percentages and, as prices rise, the tax revenue that is collected goes up. Since gas taxes are fixed, each increase requires legislators to go on record voting for a tax increase. So it's no surprise that gas taxes lag inflation. [Pop quiz: when was it last raised?]

Many states have exactly the same tax rate now as when gas was going for less than 80 cents a gallon. Gasoline prices have gone up many times and other prices have gone up as well, including asphalt and other materials highly dependent on the cost of petroleum. Gas taxes have not gone up.

The yawning gap between what gas taxes bring in and what highways cost is already here. It's not the fault of buyers who seek out vehicles that do a better job of protecting resources that states can't pay their highway bills. It's the fault of legislators who love the popularity they get from rolling out new roads, but hate to take the responsibility for paying for them.
[Source: Statesman | Image: Toby – Creative Commons 2.0]

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