The Gas Tax Shortfall

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The Gas Tax Shortfall

As the Administration rolls out a new infrastructure plan proposal, it’s useful to remember where the money comes from that funds these programs.  As we’ve talked about before, it’s a myth that transportation projects in the U.S. are funded entirely from gas taxes and user fees.  Mass Transit Magazine makes the point again in a fresh review of the current state of funding in the U.S.

According to a new article in the magazine, highway funding along is facing a $756 billion shortfall in 2020, meaning that all the required maintenance and repairs for our infrastructure or not being met –  not to mention the need for new roads and bridges.

At the same time, transit is facing a $90 billion shortfall.

The reasons are pretty simple: we rely on gas taxes for our primary funding, while at the same time we are seeing fuel efficiency increase across all vehicles – so we’re burning less gas, and paying less tax, per mile.  People are also just driving less for a myriad of reasons, from the oft-blamed Millennial generation for being less interested in driving, to living patterns changing to more urban, dense, walkable and bikable communities, to aging populations relying more on transit and other options.  These latter are both good things for a number of reasons – air quality and the environment, health, the economic vitality of our communities – but a funding stream that assumes buying gas is the same as buying transportation simply no longer makes sense.

I encourage you to read the article for the rest of the story, including some of the proposed solutions – including more public-private partnerships, tolling, and VMT taxes.

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