TPB News

TPB Urges State Leaders to Increase Funding for Transportation

Feb 4, 2013

In a December letter to state leaders, the Transportation Planning Board urged immediate action to increase funding for transportation in the Washington region, citing recent analysis showing that the transportation improvements currently planned through 2040 -- given existing revenue streams -- won't be enough to keep up with expected population and job growth in coming decades.

The TPB called on state lawmakers, the governors of Maryland and Virginia, and the mayor of the District of Columbia to consider a range of potential revenue-raising measures and provided a comprehensive list of approaches that other states and localities have successfully taken to raise additional money.

At the top of the list was increasing the fees that drivers already pay to use the region's roads, especially gas taxes. Between 2000 and 2010, 22 states and the District of Columbia raised their gas taxes; at least seven have indexed their gas taxes to inflation, meaning that as the cost of building and maintaining roads goes up, so do the fees that drivers pay to use those roads.

The other options highlighted in the letter included increasing sales taxes and dedicating the new revenue to transportation, building new toll roads like the Intercounty Connector in Maryland or the Dulles Greenway in Virginia, and allowing local jurisdictions to raise local taxes to pay for transportation. The letter points out that most recent ballot measures to increase sales taxes to pay for transit have been successful.

A major focus of the letter, however, was on raising user fees that are already in place, including the gas tax. The federal government, all 50 states, and the District of Columbia rely heavily on the gas tax to pay for building new roads and maintaining existing ones, in part because of the administrative ease of collecting the tax and in part because the amount of gas taxes paid are closely related to how much one uses roads.

Locally, the District of Columbia was the latest to raise its gas tax -- to 23.5 cents per gallon in 2009. Maryland last raised its gas tax in 1992, to 23.5 cents per gallon. Virginia's 17.5-cent-per-gallon tax was last raised in 1986. For the driver of a car that averages 20 miles per gallon, that's about a penny per mile, or about $10 a month for someone who drives the national average of 12,000 miles per year.

In states like Maryland and Virginia that haven't raised gas taxes in 20 years or more, inflation has eroded a third or more of the purchasing power of the dollars raised by the taxes, even as road construction and maintenance costs have gone up and as population and job growth have led to steady increases in demand.

And in the future, the increasing fuel-efficiency of vehicles will also eat away at the value of gas tax revenues as drivers buy less gas to travel the same distance and as those who drive cars powered by alternative fuel sources, which are becoming more popular, buy no gas at all.

But that decline will occur slowly over the next several decades, according to recent forecasts from the U.S. Department of Energy. The TPB reviewed the national outlooks at its January 23 meeting. They show gasoline consumption declining through 2040, but still amounting to 78% of the 2012 total. Diesel consumption, mainly by heavy-duty freight trucks, is forecast to increase by 37%. Together, that amounts to a 7% overall decline in motor fuel consumption over the next three decades.

The TPB also reviewed the findings of a recent study of the public acceptability of congestion pricing, another revenue-raising strategy identified in the TPB's December letter to state lawmakers.

Congestion pricing is an approach to raising revenue and managing congestion under which drivers pay fees to use roads, and higher fees on the roads and at the times that are in higher demand, like airline and utility customers do. The study engaged more than 300 residents from around the Washington region in extended conversations about the region's transportation problems and the possibility of using various congestion pricing schemes to address those problems.

The study found cautious receptivity, especially to a hypothetical scenario in which all major highways in the region have at least one tolled lane in either direction, like the new 495 Express Lanes on the Capital Beltway in Virginia. Sixty percent of participants said they would "support" or "strongly support" such a system that provides a congestion-free travel option for drivers and the potential for high-quality bus rapid transit service.

Another scenario that study participants considered would charge drivers a per-mile fee for using any road or street in the region instead of paying gas taxes. Drivers would pay higher fees on more heavily traveled routes, and GPS units in vehicles would tally the number of miles driven and the total fee drivers owed.

Only 10% of participants said they would support such a system, citing major concerns about privacy and government overreach, skepticism that gas prices would actually go down when gas taxes were eliminated, and a level of complication that would add new burdens to people's daily lives and make such a system difficult to implement and enforce. Many people wondered why any new fees couldn't just be based on mileage driven, measured by a car's odometer and reported during the periodic vehicle inspections that many states already require.

Another interesting finding of the study was a significant increase in people's support for raising gas taxes after learning more about their current levels and that they haven't kept up with inflation, and after considering more complicated solutions like congestion pricing. Prior to learning about gas taxes and considering alternatives, 21% of people supported raising gas taxes; afterward that number had increased to 57%.

Lawmakers and leaders of both parties agree about the urgent need for more funding for transportation. The Transportation Planning Board has identified a variety of measures that other states and localities have successfully employed and provided information to suggest that gas taxes will continue to be a viable source of revenue for the immediate future; that the public may be open to increasing gas taxes after learning more about past and current levels of the taxes; that other use-based options like vehicle-registration fees and odometer-based VMT fees are also viable near-term sources of revenue; and that local option taxes such as sales taxes dedicated to transit could be a valuable supplement to statewide revenue sources.

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