November 21, 2017
Transport Topics --- The American Transportation Research Institute (ATRI) has determined that a federal fuel tax increase is the best option for achieving a large-scale infrastructure program.
The research found in ATRI’s “Framework for Infrastructure Funding” showed that other methods of generating revenue, such as mileage-based user fees and increased tolling systems, will fall short of the funds needed to invest in transportation.
Repairing infrastructure was one of the pillars on which President Donald Trump built his campaign. The specifics of his $1 trillion infrastructure plan have yet to be revealed.
In addition to creating new federal funds, a federal fuel tax increase will also galvanize states to produce matching funds, ATRI found. ATRI’s study indicates that every state would experience significant employment gains with a 10-cent or 20-cent federal fuel tax increase. The report says a 20-cent fuel tax increase would yield nearly 500,000 new jobs, and states would bring in between $15 billion and $30 billion annually.
The federal fuel tax has not been increased in over 20 years. ATRI’s research cautions against the “do-nothing” approach because it can lead to significant costs for people who use the road.
Another funding mechanism ATRI identifies in the report is a federal vehicle registration fee, which could offset the costs of electric vehicle use. Electric vehicles present a “tax revenue challenge” because they do not pay fuel taxes, the report said.