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American Progress group: ditch fuel tax for user fees

The mileage-based taxation system was one of four recommendations made Friday by the Center for American Progress.

The Trucker News Services

7/11/2014

The Center for American Progress is calling for Congress to ditch the federal gas tax in lieu of a system where drivers pay fees for road construction based on how many miles they travel.

The proposed mileage-based system has been controversial in previous transportation funding debates because critics question how government would monitor the traveling habits of drivers.

But the Center for American Progress said Friday that taxing drivers based on how far they drive was a much more sustainable system than the current 18.4 cent per gallon federal gas tax, The Hill reported.

With people driving more fuel-efficient cars, the gas tax isn't bringing in enough money and Congress is scrambling to reach a deal to prevent a cut-off in federal road repair funds.

The mileage-based taxation system was one of four recommendations made Friday by the Center for American Progress, which was founded by White House adviser John Podesta.

The group’s other ideas included a 15-cent gas tax hike to “stabilize” federal highway funding, which would be used to transition government away from the gas tax, and a $100 million mileage-based fee pilot program in 10-15 states.

The recommendations come as Congress is moving toward approving a temporary stopgap that would infuse about $10 billion into the Department of Transportation’s beleaguered Highway Trust Fund.

The gas tax has been the traditional source for funding for the trust fund since it was created in the 1950’s. It hasn't been hiked since 1993.

Budget analysts have predicted that there will be a $16 billion shortfall next year between gas tax revenue and what Congress wants to spend on road projects. The gas tax typically brings in about $34 billion per year, compared with $50 billion in annual road and transit spending.

The transportation department has warned that it would have to cut its funding to states by 28 percent if Congress does not act quickly to replenish the Highway Trust Fund. 

Center for American Progress Director of Infrastructure Policy Kevin DeGood said it was time for Congress to look for other funding sources besides the gas tax if it hopes to craft a meaningful long-term transportation funding bill.

“For too long, Congress avoided addressing our transportation funding problem,” he said. “Americans need a long-term solution. Mileage fees offer an equitable and effective way to provide for our transportation needs.”

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