Untangling Transportation Funding – Brookings Institution’s paper on Vehicle Mileage Taxation

February 26, 2009 at 3:24 pm

(Source :  Thanks to Robert Puentes @ The Brookings Institution for sharing this article)

Already, we have had not one—but two—national commissions on the topic, and the U.S. Government Accountability Office (GAO) recently added transportation financing to its annual list of high-risk areas suggested for oversight by the current Congress.

Why the high anxiety? 

Put simply: the money flowing out of the federal transportation trust fund (often referred to as the “highway” trust fund) is greater than the money flowing into it. This past September Washington was forced to shift $8 billion from the general fund to cover a shortfall in the transportation account. Estimates for how short the fund will be this summer hover around $9 billion.

Despite the sharp, and perhaps simplistic, rhetoric of late, the origins of the shortfall are the result of multiple trends converging.

For one, the federal gas tax—generating nearly 90 percent of the federal transportation revenue—has not been raised in nearly 20 years, not even to keep pace with inflation. So, as the rate effectively declines, so does the purchasing power of the trust fund. The current 18.4 cent per gallon tax in the U.S. is far less than in European competitor nations.

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DOT will take back seat to White House advisers on climate — LaHood

February 25, 2009 at 2:47 pm

(Source: ClimateWire via NYTimes)

LaHood told a group of state transportation officials that while he has already taken part in a number of meetings to discuss climate change legislation with Obama, DOT would likely take a back seat in the climate debate.

“We’ve really taken all of our cues from Carol Browner,” he said, referring to the White House coordinator for energy and climate issues.

LaHood said Browner and U.S. EPA Administrator Lisa Jackson would most likely do the heavy lifting when it comes to meeting Obama’s climate goals. DOT is “in the room, we’re at the table, but we probably have less of a role than perhaps some of these other agencies do,” he said at the Washington forum.

DOT instead will focus on finalizing new corporate average fuel economy, or CAFE, standards for the auto industry.

LaHood said his agency was working to finish the rulemaking for model year 2011 by this April’s deadline. “We’re going to move that out the door,” he said. “We’re going with what the president asked us to do with respect to CAFE standards.”

Under the proposed rulemaking issued by DOT last year, carmakers would have to raise their fuel economy by 25 percent by 2015. The proposal would push automakers more than halfway to the minimum goal set by Congress of an average of 35 mpg by 2020.

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Breaking News: Obama nixes plan to tax motorists on mileage

February 20, 2009 at 7:56 pm

(Source: Associated Press via Yahoo.com)

President Barack Obama on Friday rejected his transportation secretary’s suggestion that the administration consider taxing motorists based on how many miles they drive instead of how much gasoline they buy. “It is not and will not be the policy of the Obama administration,” White House press secretary Robert Gibbs told reporters, when asked for the president’s thoughts about Transportation Secretary Ray LaHood’s suggestion, raised in an interview with The Associated Press a daily earlier.

Gasoline taxes that for nearly half a century have paid for the federal share of highway and bridge construction can no longer be counted on to raise enough money to keep the nation’s transportation system moving, LaHood told the AP.

“We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled,” the former Illinois Republican lawmaker said in the AP interview.

To read the entire article, click here.