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John B. Townsend II

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The Fuel Tax, Toll Roads, And Washington's Protracted Silly Season

Posted: 09/27/11 05:35 PM ET

Like Charon the Ferryman who took the souls of the dead across the River Styx in the underworld, Virginia and Maryland are turning to tolls to build and maintain roads. How did it come to this? Look no further than to the motor fuel tax for important object lessons that Washington is forsaking.

America boasts 210 million licensed drivers and a fleet of 246 million registered vehicles. Although the country's current population is over 311 million strong, it is the nation's drivers who disproportionately help to finance road construction and repair projects and transit systems. They do so each time they pull up to the gas kiosk. So they will be surprised to learn the federal fuel tax expires at the end of this month.

Because of the political intransigence in Washington, any thought of increasing the levy on each gallon of gasoline and diesel fuel is out of the question. Proverbially, this is the protracted silly season in Washington. Like some governors, an element in Congress wants to "'devolve' the tax, along with the Federal-aid highway program, to the states."

Congress last raised it in 1993. The federal fuel tax was only one red cent at its inception in 1932. It's 18.4 cents on a gallon of gasoline and 24.4 cents on a gallon of diesel fuel today. For decades, it functioned as a reliable funding source for the nation's transportation infrastructure. But now its glow and buying power are diminished.

That's due to four major factors: the protracted economic downturn, the improved fuel economy of the nation's vehicle fleet, the failure of the fuel tax to keep pace with inflation, and the high cost of fuel. As to the latter, the price of a gallon of gas is nearly a dollar higher compared to a year ago. Consumers are on course to spend nearly half a trillion dollars on gas this year -- almost $50 billion more than the previous record, energy watchers say. This, in turn, is causing gas demand to decline and forcing motorists to drive fewer vehicle-miles traveled (VMT).

Given this, the country sorely needs to increase its revenue stream for transportation. But the federal fuel tax is now the third rail of the body politic. Anyone who touches it will perish at the ballot box. This is an existential fear for politicians at the local, state and federal levels. Even the thought of renewing the motor fuel tax come September 30 will likely produce the next battle royale in a deeply and politically divided Washington. We are seeing the consequences of the refusal to raise the gasoline tax at the federal and state levels.

In our region the storehouse is empty despite the fact that both Virginia and Maryland got back $1.07 for every dollar they contributed to the Federal Highway Trust Fund between FY 2005 to FY 2008, according to the GAO. The District's windfall is staggering -- it's $5.63 for every dollar it contributes to the Highway Trust Fund. That's the highest return per dollar contributed in the nation.

Yet Virginia's state fuel tax rate has remained unchanged since 1986. The commonwealth's motor fuel tax is 17.5 cents per gallon, one of the lowest rates in the nation. Last year, for the first time in 20 years, Virginia lawmakers passed a $3.2 billion transportation package to underwrite 900 transportation projects across the state for the next three years. Even that was an uphill grind.

In an ancient reflex, the states are behaving like the Ferryman of yore. Like it or not, the states, Virginia included, are asking the federal government to change the age-old ban on tolling interstate highways. Like a white knight, the Federal Highway Administration recently granted Virginia a tentative nod to place toll booths on Interstate 95 and to toll motorists driving into the state from its border with North Carolina.

In this grand experiment, North Carolina is now seeking the federal okay to do the same on its border with Virginia. Where will this end? This just isn't any old road. Running parallel to the Atlantic Ocean from Maine to Florida, I-95 is a major north-south corridor on the Eastern Seaboard. Next: toll booths on the dark side of the moon.

Drear is the situation on the Maryland side of the Potomac. Now, to pay for aging infrastructure and bridges across the state, Maryland is also tolling for dollars. To raise $225 million, Maryland is nearly doubling the tolls motorists will pay to use its highways, tunnels, and bridges, starting November 1.

By July 2013, tolls will increase to $6.00 for motorists crossing the Chesapeake Bay Bridge to its Eastern Shore, and the Henry W. Nice Bridge spanning the Potomac River. As in Greek mythology, motorists will pay the Ferryman's toll with the coins covering their mouths and eyes to avoid wandering in the mists and marshes in the transportation underworld.

But tolling won't replenish the state's depleted road kitty. So, Maryland lawmakers are pondering an increase in the state excise fuel tax. Why? The state has a funding shortfall greater than $40 billion for its "critical highway, transit, port and airport projects," estimates the Greater Baltimore Committee (GBC).

Maryland has not raised its excise fuel tax since 1992. The state exacts 23.5 cents on each gallon of gas and 24.3 cents on each gallon of diesel sold within its borders. Although state leaders keep promising to put the "trust" back into Transportation Trust Fund, they keep raiding it. Plundered time and again since 1984, Maryland's Transportation Trust Fund is the proverbial cookie jar. Yet Maryland owes $1.117 billion in repayments to the trust fund. Most of that booty was raided from the Highway User Revenues fund used to maintain county and local roads. The state has despoiled it ten times from FY 2003 to FY 2011 to the tune of $947.5 million.

That's no way to run a railroad or to fund highway infrastructure and mass transit projects and to repair bridges and roads. America's infrastructure is crumbling, and we are whistling past the graveyard. Washington has the worst regional traffic gridlock in the nation and the worst political gridlock in the world. We need continuous improvement in our transportation system, and we need to improve and increase its mobility, safety and sustainability. But that can only be done by an infusion of funding.

The states can't toll their way out of Hades. All roads lead to Rome, the old saying goes. If only that could be said of Washington.