Guest Commentary: State gas tax is doomed

Guest Commentary: State gas tax is doomed

By TIM JONES
BetterGov.org

As roads and bridges in Illinois crumble, so too does the primary source of revenue the state relies on to fix them — the gas tax.

Illinois adds 19 cents to the pump price of each gallon of gas to underwrite road work, a fee that hasn’t changed in 27 years even though inflation has cut the purchasing power by half. And with cars getting ever better gas mileage, the so-called Motor Fuel Tax reaps less today to fund repairs than it did a decade ago: $1.38 billion in 2007, last year $1.28 billion, state data shows.

Experts warn that the same march of technology that has helped lay waste to manufacturing, in-store retailers, print-on-paper newspapers and other businesses, will soon exact a similar toll on the revenue-generating power of the gas tax. That will set Illinois, other states and the federal government, which levies a similar tax for road work, scrambling for alternatives.

The ultimate disrupter could be the electric car, which Ford, General Motors, Volvo and Tesla have all committed to making in a big way. Though it won’t happen overnight, the equation eventually becomes simple: the fewer internal combustion engines powering the vehicles of tomorrow, the less gas tax collected.

“It’s completely unsustainable, and it’s really a crisis right now,” said Audrey Wennink, director of transportation for the Metropolitan Planning Council. “You can boost or change the structure of the gas tax, as some states have done, but in the long term it isn’t going to work. You have to find another way.”

She gives the tax five more years before the bottom drops out.

Wennink’s group last year proposed a 10-year, $43 billion transportation plan for the state that included a 30-cent leap in the gas tax. To no one’s surprise, the idea was a non-starter in a political climate where tax hikes are a hard and sometimes toxic sell.

Recent talk in Springfield about a new infrastructure development program prompted the reelection-seeking Gov. Bruce Rauner to say he would not support a higher gas tax, which was last raised in 1990. Only three states — Mississippi, Oklahoma and Alaska — have gone longer without boosting their gas taxes.

In Washington, discussions over a $1 trillion infrastructure plan have generated talk of raising the federal gas tax of 18.4-cents a gallon, according to Bloomberg News. The federal tax has stayed the same since 1993, and there are few signs of support from the Republican-controlled Congress, where most members have signed a pledge not to raise taxes of any kind.

Illinois is in many ways an outlier when it comes to pinching transportation related revenue sources.

Transportation for America, a nonprofit advocacy group, says 31 states have hiked transportation revenue since 2012, with 20 of them bumping up charges for their gas tax. In 2016, New Jersey raised its per-gallon charge from 14.5 cents-a-gallon to 37.5 cents, a whopping 23-cent increase.

But transportation analysts characterize that spate of state gas tax hikes as a stopgap, a last gasp effort to temporarily finance road and bridge repairs until a more reliable replacement funding source can be put into place.

“There’s a strong argument that says we need to boost or change the structure of the gas tax, to index it, which some states have done. But in the long term it isn’t going to work. You have to have another way,” said Joseph Schofer, a professor of civil and environmental engineering at Northwestern University.

Schofer said recent public votes on transportation funding plans, such as in Los Angeles and Atlanta, show that voters will support higher taxes and fees for specific programs that are well-explained.

But replacing a nearly century-old taxing mechanism that would directly affect a broad cross section of voters in an entire state is another matter. As unpopular as the one-size-fits-all gas tax is with some drivers, the alternatives can be financially, economically and politically problematic.

Toll roads wouldn’t affect all drivers in a state. Hiking registration fees wouldn’t account for the wear and tear different vehicles impose on highways. And a miles-driven system as in Oregon can lead to its own counterintuitive impact on fuel efficiency.

“There’s pushback to the mileage-based plan, and it comes from politicians who are very much focused on the next election and fearful of that,” Schofer said. “They’re saying “no, I don’t want to raise the gas tax and I can’t give you an answer on how the hell you’re going to pay for (road upkeep.). So there’s a mismatch.”

“Eventually, the motor fuel tax is going to be irrelevant,” he added.

Tim Jones wrote this story for the Better Government Association.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
GLG wrote on November 20, 2017 at 10:11 am

Mr. Jones should write another story of how for decades the motor fuel tax fund was stolen from by members of both parties in Springfield. Every time a state agency need a few million dollars it was "Swept" from the fund. We now have legislation in place to keep the road money in the road fund. There a lot more cars on the road still using gas than 20 years ago, The gasoline car is not going anywhere soon, Hey what ever happened to the nitogen fuel cell technolgy that General Motors was working on in the late 90's?

dw wrote on November 21, 2017 at 10:11 pm

Hiking registration fees wouldn’t account for the wear and tear different vehicles impose on highways. And a miles-driven system as in Oregon can lead to its own counterintuitive impact on fuel efficiency.

That's why you use a hybrid system like in New Zealand:   miles driven with a damage-done multiplier, and it's simple as long as your mileage sticker must be pre-purchased (no tracking system required).  

It's not difficult, we don't have to re-invent the wheel, and it's not a difficult argument to make in a capitalist society:  if you're charging for road wear in order to repair it, you charge in relationship to the damage done to the road (how much someone consumes).  Fair enough.

Until you examine which vehicles do the damage: a semi tractor trailer does 800 - 3000 times more road damage per mile than a passenger car (google "what causes road wear" and look at the PDF from Philip A. Viton).  Turns out that in comparison the damage done by passenger vehicles compared to the high weight per axle vehicles is insignificant. 

But it's primarily the paassenger vehicle owners being fleeced to support the road repair fund...