Gov. McDonnell’s transportation bill has been attacked from all flanks. Progressive Virginians are upset about new hybrid vehicle fees, and conservative Virginians are upset about “new taxes” levied to finance a cut in the gas tax and much needed infrastructure development. But Gov. McDonnell deserves credit for taking on the problem of gas taxes no longer working: his actions will redefine infrastructure policies for our generation.
Stephen Dubner, co-author of the book “Freakonomics,” recently published a podcast outlining the problem. According to the Congressional Budget Office, vehicles manufactured from 2017 to 2025 will be required to achieve between 34.1 and 49.6 miles per gallon due to increased fuel efficiency standards. Higher mileage standards are necessary to achieve energy independence and to curb the impact of cars on the environment, but also reduce the costs of driving and require us to buy less gas, driving down gas tax revenue. The gas tax was used to fund road maintenance until drivers began to shift towards greater fuel economy.
The gas tax was designed as a “user pays” system. Trucking companies that use Highway 81 should have to pay to maintain it just like I do when I drive to and from Virginia Tech. But since the tax is not indexed to inflation, and we have more fuel efficient cars, revenues have dropped. Recently, several proposals have popped up nationwide to solve transportation revenue problems.
One idea is to focus more on sales tax to fund roads. A sales tax to fund roads violates the “user pays” principle because poorer Virginians who use the roads less pay more of their income in sales taxes than truckers who pass through our commonwealth for six hours at a time hauling goods to other markets.
Grover Norquist said the “user pays” idea should scrap any new taxes and fees and “direct more general-fund revenue toward infrastructure.” But that would mean cutting other vital services like Medicaid and school funding. We do have to pay for our roads and other services if we want to keep them. Even a staunch federalist would agree that roads and infrastructure should be the purview of state government.
Dubner mentions tracking how much people drive and charging them for road use at the end of the year. A simple check of the odometer on state inspections could give a reading of how far a driver has gone and then the commonwealth could levy state taxes based on that driver’s actual use of our roads. We could also use GPS technology to achieve the same goal.
Any proposal to fix our transportation funding system is going to be controversial and imperfect. We must do a better job of ensuring that people who use our roads pay for our roads. Gov. McDonnell’s plan punishes hybrid vehicle owners and imposes taxes on the poor for roads they do not use as much as the previous tax base. But despite poor policy decisions, I compliment the governor for tackling a big problem with no easy solution.