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Going Forward: Prospects for Transitioning from Gas Taxes to Vehicle-Miles-Traveled Fees

Jun 2011
Policy Brief
By  Kumi Harischandra, Justine Isola, Joe Nation, Lazeena Rahman, Anthony Suen
The U.S. transportation system is facing a funding crisis. In 1956, Congress established the Highway Trust Fund to ensure a dependable source of revenue for U.S. highways and transit systems. However, over time, inflation has eroded the purchasing power of the gas tax because it is fixed in nominal terms per gallon, and fuel efficiency is increasing. As a result, the costs of maintaining roads and highways are now outpacing revenue generated from the gas tax. The last long-term surface transportation legislation expired in 2009, and Congress extended existing financing on a temporary basis. This funding shortfall comes at a time when the United States needs new investments to meet continued transportation challenges such as aging infrastructure, a growing population, and an expanding economy. The House Committee on Transportation and Infrastructure introduced the Surface Transportation Authorization Act of 2009 to modernize national transportation policy and is currently holding hearings on the issue. This upcoming reauthorization offers an opportunity to discuss the funding shortfall alongside other key priorities such as greenhouse gas emissions, energy independence, and distributional equity of funding the transportation system.