Our Transportation Funding Disconnect

Gas taxes can no longer provide the revenue to keep up with our needs. We should look at alternative ways to pay for roads and transit systems.
by | July 9, 2012
 

Tolls of between $2.50 and $3.50 will likely be needed to support the $3.2 billion cost of a new Seattle tunnel project. But a new study finds that at those rates, 42 percent of the tunnel's users would likely avoid the tunnel, choking downtown streets with 9,100 additional cars during the daily commute.

Seattle's dilemma is just the latest example of the need for radical change in the way American transportation systems are funded.

With the growth of high-mileage and alternative-fuel vehicles, revenue from state and federal gas taxes, which have long been the main source of road and bridge funding, can no longer keep up with inflation. As a result, the federal Highway Trust Fund has twice run out of money in the last few years.

The Boston area's Massachusetts Bay Transportation Authority is the poster child for the fact that transit systems aren't doing any better. A large percentage of MBTA's trains, buses and infrastructure have been in service for longer than they can reasonably be expected to last. Meanwhile, the agency has a $3 billion maintenance backlog, owes $8.6 billion in principal and interest, and pays nearly as much in debt service as it collects at the farebox, despite a July 1 fare increase.

There are many contributing factors to our transportation-finance crisis. In the MBTA's case, unfunded expansion was the major culprit. Across the country, elected officials have been loath to propose the revenue sources needed to build, operate and maintain the kind of transportation systems that promote long-term economic growth.

But Seattle's dilemma illustrates two more closely related problems. First, we expect each mode of transportation, or even each asset, to be self-supporting rather than part of an integrated system. Second, that expectation reflects a mindset in which customer service isn't the top priority. People want to get themselves and businesses want to get their goods from point A to point B as efficiently as possible; whether that involves a car, train or bus is far less important.

One way to address these problems is to introduce a system in which motorists pay each time they use a limited-access highway in a metropolitan area. Revenue from electronic tolling or vehicle-miles-traveled (VMT) charges could be used to support assets such as Seattle's new tunnel without chasing away potential users. Even more important, these approaches could move us toward an integrated system that is better for the environment and promotes overall mobility by using roadway revenue to support transit and freight rail, which take vehicles off the road.

Electronic tolling and VMT are also far more effective demand-management tools than gas taxes because technology makes it possible to charge more or less based on factors like congestion levels and vehicle weight.

There would no doubt be massive resistance to such a radical transportation-finance transformation, even if it spelled the end of gas taxes. Change won't come overnight, and when it does come, it probably won't be in an election year. But Seattle's tunnel dilemma is only the latest evidence that the current system is a road to nowhere.

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