Motor fuel taxes have a long history as the preeminent funding source for surface transportation investments. During the second half of the twentieth century, federal motor fuel taxes provided a reliable source of funding, first for highways alone and later for transit as well. During much of this period the federal focus was on creating a national transportation system, and taxes on motor fuels provided an expedient and practical means for funding the needed infrastructure. The public and political leaders recognized the importance of this endeavor and generally supported the need for fuel taxes and the link to transportation investment. In recent years, however, fuel tax revenues have significantly lagged behind the level of investment required to sustain a world- class transportation system.
Looking forward, a variety of factors are converging to challenge the preeminence of motor fuel taxes as the primary source of surface transportation funding | Looking forward, a variety of factors are converging to challenge the preeminence of MFTs as the primary source of surface transportation funding. Due to a combination of travel growth, system deterioration, increasing construction costs, and lack of indexing, fuel tax revenues are becoming increasingly inadequate to meet investment needs. This inadequacy will likely be exacerbated as improved fuel efficiency and the development of alternative fuel vehicles reduce fuel consumption. Moreover, the public's willingness to pay for the required investments through an increase in motor fuel taxes appears to be weak and may be declining. At the same time, the growing need to maintain and adequately fund a national transportation system will heighten the importance of developing a funding approach that will meet future system improvement and maintenance needs. In urban congested areas, it is possible that charging users of the system more directly will not only raise revenues but also influence driver behavior and lead to reductions in both congestion levels and the investment that is needed. |
The bottom line conclusion of the Commission is that motor fuel taxes are currently the most viable federal funding source for surface transportation investment and will likely remain so for several years. The inability of these taxes, particularly at current rates, to meet future investment needs, however, clearly raises questions about their long-term sustainability.