The President’s $1 trillion infrastructure plan continues to be a hot topic of discussion despite other high profile policy debates in Washington these days. Within this discussion, an essential principle for funding upgrades to the nation’s highways, bridges and tunnels may be gaining traction: users of infrastructure should pay for that infrastructure.
It’s a common sense notion that commercial trucks, for example, should pay for the roads and highways they use and degrade over time. But currently they don’t. Taxpayers, in large part, do.
The U.S. highway infrastructure currently relies on federal and state gas taxes collected from drivers of trucks and passenger vehicles, as well as significant funding from the general U.S. Treasury. Since 2008, policymakers have transferred $143 billion in general taxpayer funds to cover short falls in the Highway Trust Fund. This trend of shifting responsibility to the general public while the trucking industry fails to pay for all the infrastructure damage it causes erodes the user pay principle underlying the Highway Trust Fund. It dilutes the contribution that the trucking industry – a major railroad customer and competitor – pays for its infrastructure.
What’s more, the U.S. Congressional Budget Office projects that funds for the Highway Trust Fund will be exhausted by 2021, so there is a huge incentive for policy makers to come together and figure out a way to fund core infrastructure without sticking it to taxpayers.
A new report from researchers at the Brookings Institution, the University of Arizona and the University of Houston points the way. It touts the benefits of “financing highway expenditures by charging drivers and truckers for the amount they drive in the form of a tax on Vehicle Miles Traveled (VMT),” according to the Journal of Public economics, where their research appeared.
The researchers recommend that “states such as Oregon and California continue experimenting with implementing a VMT tax and urge the federal government to implement a VMT tax.”
The idea is apparently of interest to U.S. Transportation Secretary Elaine Chao, who said at a Senate hearing recently, “We actually have begun to look at perhaps using different kinds of measurements for funding highways, and one of which is the mileage, using mileage travel as a parameter as well.”
Elected officials at both ends of Pennsylvania Avenue should institute a system that requires highway users, such as trucks and everyday drivers, to pay for their fair use of infrastructure. The traditional connection in which users of highway infrastructure pay for that infrastructure should be strengthened, and policymakers should consider solutions such as a weight distance fee to instill a truly equitable system.
Several states impose such a fee on owners, operators and registrants of intra and interstate commercial vehicles in excess over a certain weight. This tax is based on vehicle weight and miles traveled on a state’s roads. At the same time, some states are assessing the potential of mileage-based user fees for all vehicles.
The Government Accountability Offices says the mileage-based approach could fund highway infrastructure needs while reducing damage to roads through overuse.
“Mileage-based user fee initiatives in the United States and abroad show that such fees can lead to more equitable and efficient use of roadways by charging drivers based on their actual road use and by providing pricing incentives to reduce road use,” said the GAO in a study.
It is with some slight irony that Congress just this week may be weighing in on whether to allow a so-called pilot program that would welcome dramatically heavier trucks on the road, trucks that would chew up highways and bridges even more.
The black hole in funding highways is in stark contrast to another subset of national infrastructure, the nation’s freight rail lines. America’s privately owned freight railroads operate almost exclusively on infrastructure that they own, build, maintain and pay for themselves, more than $100 billion over the past four years. This sets them apart from their competitors—trucks, barges and airlines. And those investments are why rail earned the highest grade from the American Society of Civil Engineers – a “B”.
By contrast U.S. roads are in dire need of repair, receiving a devastating grade – a “D” – in the same report card from ASCE. In 2013, the Federal Highway Administration estimated the annual investment needed to improve the nation’s roads topped $170 billion.
The only way to turn this around is with adequate funds, collected in part through a mileage fee. Why should taxpayers be stuck with the huge tab for upgrading highways? Instead, truckers should pay their fair share for the infrastructure they use and from which they profit.