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52 F I NA NC I NG S U R FA C E TR A NSPOR TA TION IN T HE U NIT ED ST A T ES As these programs are being advanced, the administra- Revenue options were evaluated primarily on the basis tion's stance is that there will be no increase in the motor of their ability to fill the federal funding gap--which is fuel tax, no surface transportation fees, no aviation user $54 billion--or facilitate state and local revenue options. fees, and no tolling of existing Interstate highways. This One of the most obvious choices would be to raise the leaves the following funding options: unprecedented and federal motor fuel tax. Increasing the motor fuel tax by disproportionate taxpayer funding, a shift to new mod- 1 cent per gallon would raise $1.8 billion in annual rev- els of user fees, nonfederal funding options, or a combi- enue. On the pro side, an increase in the motor fuel tax nation of the above. could generate significant revenue in the short term, but For the past 50 years, Mr. Van Beek noted, the United on the con side it is only an indirect user fee, it is regres- States has made transportation policy by mode rather sive, it raises equity issues, and it lacks sustainability. than by national mobility goals. We have walled off A VMT fee could also generate significant amounts trust funds and relied on a supply center system that is of revenue. A per mile fee of 0.06 cents is equivalent to imploding. Since the passage of the Intermodal Surface a 1-cent motor fuel tax. Many issues would need to be Transportation Efficiency Act in 1991, we have tried to resolved. Would a federal VMT tax be charged for travel think multimodally, and today our modal and intermo- on all roads? Would there be different fee structures for dal systems face the challenge of climate change. Europe different types of roads? Would trucks pay higher fees? is following a much different comodality approach that If VMT fees were only charged on the Interstate high- uses different modes on their own and in combination way system, they would have to be four times higher to with the aim of obtaining an optimal and sustainable generate the same levels of revenue as charging for travel utilization of resources. He commented that the United on all roads, and diversions to local routes could prove States needs to break out of its modal framework and problematic. develop transportation policy that is mode-neutral. Vehicle registration fees have revenue potential, but the federal government should not obstruct the ability of states to use this revenue tool. This fee would be simple to Evaluating the Potential of Available impose. Together, vehicle registration fees of $5.00 for cars FundingRevenue Options and $10.00 for trucks would generate as much revenue as a 1-cent gasoline tax. A national sales tax of 0.06 percent Craig Lentzsch discussed the findings of the report of the would be equivalent to a 1-cent gasoline tax. Developing National Surface Transportation Infrastructure Financing a mechanism to levy a national tax together with state and Commission, which was released in February 2009. The local sales taxes would be complex, but it could be com- commission was created by the Safe, Accountable, Flex- bined easily if there were a national value added tax. This ible, Efficient Transportation Equity Act: A Legacy for would be a highly regressive approach and would support Users to assess transportation investment needs and pro- the notion that transportation is a public good, which is vide Congress with findings and recommendations. As a contrary to the commission's guiding principles. commissioner for the study, Mr. Lentzsch summarized our Tolling the Interstate system could generate signifi- current problems in a single word: revenue. Today high- cant revenue levels but introduces the complex question way users pay only 60 percent of the cost of providing our of how much money would be raised, where it would highway infrastructure. Motorists pay 3 cents per vehicle be spent, and what would happen if money generated in mile traveled (VMT) in motor fuel taxes, and heavy vehi- one location or state were spent elsewhere. These issues cles pay proportionally less. Transit users pay anywhere tend to dictate that the money raised would need to be from 20 to 70 percent of their costs. Regardless of mode spent on the Interstate system only and would divert traf- of travel, Americans do not pay for their full transporta- fic to local routes, which would not be desirable. tion costs. The current debate hinges on whether the user A freight waybill tax could be used to replace the should pay or whether transportation is a public good. motor fuel tax for heavy-duty vehicles. A tax of 0.3 per- The commission adhered to six guiding principles in cent would generate revenue equivalent to a 1-cent gaso- its approach to its work: line tax, but the tax would have no relation to use or weight of trucks or the fact that half of all goods shipped Enhance mobility of all system users. in the United States travel on company-owned trucks. Generate sufficient funding on a sustainable basis. The freight sector does not currently pay its fair share of Cause users to pay the full cost of system use to the transportation, since axle weight comparisons alone sug- greatest extent possible. gest that trucks generate 5 to 10 times the maintenance Encourage efficient investment. demand of passenger vehicles. Incorporate equity considerations. Combinations of options can be used to mitigate Support broader public policy goals (i.e., energy the various issues that individual measures may trigger. and environment). According to Mr. Lentzsch, if an intelligent combina-