Highway Trust Fund Problems Continue

I was quoted in a MinnPost article today about a long-standing problem that I've blogged on before (see 9/5/08 post). With people driving more fuel efficient cars, less gasoline excise tax is collected, yet the roads still require the same amount of maintenance.

In today's Minn Post article ("Oberstar points to road problem: a shortage of federal gas-tax revenue"), Derek Wallbank explains why there will be about a $140 billion deficiency in the highway trust fund (HTF) due to a decline in gas tax revenues. He also notes that the gas tax has not been increased since 1993.

"Because it is not adjusted for inflation, the federal gas tax has experienced a cumulative loss in purchasing power of 33 percent since 1993 — the last time the federal gas tax was increased."

Possible short-term solutions - other than continuing the new practice of shifting large amounts of money from the already trouble General Fund to the Highway Trust Fund ($8 billion was transferred in 9/08):

• Increases to the gasoline excise tax should be phased in over a period of years starting January 1, 2011 (delayed until at least then to help the struggling economy).
• When CAFE standards are increased or dates for meeting them moved up, there should be an accompanying increase in the gasoline excise tax. [info from DOT]
• Review the work undertaken by Oregon a while back to get ready for this new issue of more fuel efficient cars. Many people don't like the VMT approach - where you pay based on miles driven, because then we need some way to track our miles (which our odometer already does, but doesn't record it anywhere) and it would not necessarily encourage more fuel-efficient vehicle purchases. The National Surface Transportation Infrastructure Financing Commission also has studied alternatives. They issued a comprehensive report in February 2009, but it doesn't seem to have received a lot of attention. The GAO also issued a report (shorter) in June 2009. There was a hearing in the House Budget Committee on 3/17/09.
• Look into value pricing. Some people are willing to pay more than they currently do and we should take advantage of that. For example, allow people to pay a premium to drive in the carpool lane during certain times of the day. [info from DOT]

What do you think?