Archive for the ‘transportation finance’ Tag

Consequences of the Clean Transportation Paradox

Today’s forum on surface transportation funding, held on Capitol Hill (ironically the same room as the Carrots and Sticks Green Bank briefing) highlighted a growing fiscal crisis that spans the country.  Not like we have enough of those already, right?  The forum, hosted by the Rand Corporation, focused on a sour political fact: the old ways of paying for highway funding can no longer meet the monetary demands of our transportation system. 

 What Martin Wachs, the forum moderator and Director of Transportation, Space, and Technology Program at Rand, focused on specifically was the gasoline tax.  When the tax first rose to prominence in the 1930’s, it made an decent amount of sense.  It raised money, rose in proportion to highway use, and most importantly was a “user-fee.”  It taxed most those that used the system most.  Flash forward 80 years and the tax no longer seems like a good idea.  Thanks to high fuel prices and environmental deterioration, cars have become more efficient.  People can now drive more and pay less at the pump, and our roads suffer.

So what’s a country to do?  Wachs offers 4 distinct proposals- raise the gas tax, start funding transportation from the general fund, borrow, or institute a Vehicle Miles Traveled (VMT) tax.  Of course, raising the gas tax is no longer politically viable thanks to gas prices.  Pulling from the general fund wouldn’t be fair to those that don’t drive often.  Borrowing isn’t sustainable.  So that leaves the VMT tax, which will be a more specific user based fee.

Paul Sorenson, also of Rand Corp., fleshes out the VMT tax with a series of possible implementation plans: distances can be measured through odometer readings, vehicle MPG estimates, GPS monitoring devices, and a RFL monitoring device (much like an E-Z Pass card).  Each method has its own implementation and political challenges, and Sorenson didn’t endorse any one particularly.  A common theme of the second half of the forum was a lack of commitment- all parties seemed to agree that more planning, analysis, researching, and testing was needed before a specific strategy could be endorsed.

As the forum was opened up to a more general discussion, the conversation shifted to two subjects: privacy and politics.  The former is the subject that the political experts- Jim Tymon, Republican on the House Transportation and Infrastructure committee, and Paul Schmid, Legislative Analyst for Sen. Tom Carper, pointed out as the public’s largest concern.  However, all the members of the forum agreed that such concerns may be allayed via outreach and efforts made at ensuring confidentiality.  Politically, its unclear that all that much will change in the near future.  Even though both the States and Federal government are quickly running out of transportation money, the best reform we can hope for is some sort of Federal pilot program.

There is no doubt that a crisis is brewing, and there appears to be bipartisan support for some sort of tax increase.  Good news aside, it also appears that no real change is coming for a while.  The experts just don’t know enough.  But the forum also seemed to lightly pass over the possible political difficulties of raising taxes via a rather invasive procedure.  The current political climate on the hill is contentious enough, and even a reasonable solution like a VMT fee could prove to be an immensely controversial fee- a fact that Jim Tymon pointed out.  In a discussion of possible tax increases, Tymon displayed a distaste for some of the environmental and community programs that the current tax funds in addition to the highway system.  That does lead one to wonder who we should tax for environmental damages if not drivers, but that’s a debate that will likely be played out many times if this proposal ever makes it into legislation.

-James

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