The nation's significant underinvestment in surface transportation infrastructure has brought us to a crisis. Developing a revenue-raising approach that can generate significantly more funding for our surface transportation system is therefore a high priority. Legitimate debates about how to measure the transportation "investment gap," how responsible the different levels of government should be in addressing that gap, and how to determine which investments to make with any given level of resources should not derail efforts to raise more revenue. Doing so, at least in the short and medium term, will most likely require a combination of a number of revenue sources to build a viable funding strategy. Moreover, it must be recognized that there is not likely to be one politically feasible "silver bullet" solution to meet the full range of national needs. Options to address urban challenges, such as those that incorporate congestion pricing approaches, for instance, will not be appropriate for vast areas of the country.
• Since 1988, constant spending (in 2008 dollars) on highways grew 38 percent, but actually declined by 7 percent when considered in relation to vehicle miles traveled. Similarly, constant transit spending grew by 47 percent since 1988, but this increase was only 14 percent in relation to passenger miles traveled. • Total combined highway and transit spending as a share of gross domestic product (GDP) has fallen about 25 percent since the beginning of the federal Highway Trust Fund. • By not adjusting the tax rate for inflation, gas tax receipts have experienced a cumulative loss in purchasing power of 33 percent since 1993 (the last time the gas tax was increased). | Of equal importance to the quantity of revenue that can be generated is the sustainability of those revenues for meeting current and future demands. It is not enough to offer a funding framework that can meet identified needs in the short term. Ideally, the package also must be able to meet these needs on an ongoing and sustainable basis. Sustainability can be measured by the extent to which funding mechanisms can be adjusted by system operators or policy makers to meet needs over time, including adjusting for inflation. Sustainability also must incorporate the relative scalability, stability, and predictability of a set of approaches. Our current federal funding approach is weakened by two factors. First, by not being indexed to inflation, the Highway Trust Fund's purchasing power relative to needs erodes over time. Without periodic correction by Congress, the gap between needs and revenues grows. Second, increasing fleet fuel economy and changing vehicle technology will erode the long-term sustainability of fuel-tax-based revenue mechanisms, as vehicles use less (and different) fuel over the same distance traveled and thus pay lower taxes for the same travel benefit. |