Americans are easing up on the gas as the price of gasoline remains high. It means shrinking funds in federal highway coffers. One of the ways Congress is considering raising the 1.6 trillion dollars needed to repair the nation’s transportation infrastructure is through tolls on federal roads. Host Bruce Gellerman speaks with the Wall Street Journal’s transportation reporter, Christopher Conkey.
GELLERMAN: For whom do the roads toll? Well soon they’ll probably be tolling for thee. Next year Congress has to grapple with a new six year transportation bill and tolls are high on their list of ways to make a dent in the estimated 1.6 trillion dollars needed to repair America’s ailing roadway infrastructure. The bill comes due just as high gas prices have had a profound effect on driver behavior. Over the past seven months Americans have driven 40 billion miles less than usual, which means the federal highway tax coffers - dependent on the sale of gasoline and diesel - have shrunk, putting highway taxes and road repairs on a collision course. Christopher Conkey writes about transportation issues for the Wall Street Journal. Hi Chris.
CONKEY: Hey Bruce.
GELLERMAN: Is it really true Americans are driving 40 billion miles less than they usually do?
CONKEY: Indeed, and it’s probably going to get worse if gas prices don’t go down pretty steeply. That 40 billion mile decrease has happened since November, so over the last seven months or so. But May was the third steepest monthly drop ever and if you look at the period from March through May when gas prices started spiking over four dollars that was the steepest three-month pullback we’ve ever seen in people driving on the roads.
GELLERMAN: And, conversely, people are using mass transit more and more.
CONKEY: Uh, indeed, straining the capacity really of a lot of transit agencies who don’t have the money to make capital investments to add more cars, to run longer trains, to add service. And of course over the last few years and specifically in the last two years consumers have been shifting towards more fuel-efficient cars and that is really accelerating as well.
GELLERMAN: This effect of having more efficient cars driving less miles is really putting the hurt on the taxes that the government’s collect—the federal government and the states.
CONKEY: It does. The less gas you’re buying, the less gas tax revenue is pouring into state and federal coffers and that’s the main funding source for mass transit and especially for highways.
GELLERMAN: Now as I understand it ther’re two funds here. There’s the Federal Highway Fund, which goes for roads, and then there’s this Mass Transit Account, which goes for subways and buses and that kind of thing.
CONKEY: Right but they both depend upon gas tax revenue. Basically it all flows into the giant US Treasury fund and then it gets transferred into the Highway Trust Fund which itself has two components, the highway account and then the mass transit account. Of every dollar that flows into the Highway Trust fund, about 80 cents of it goes to highways and about 20 cents goes to transit.
GELLERMAN: But now that highway account is running in the red, it’s what, five billion dollars underwater?
CONKEY: Something like that, it’s a little bit hard to say. I mean the amount of revenue coming into it is about four point five billion to five billion below what the government was expecting even earlier this year. It really is going down which is a really remarkable change for the past, when driving has just increased and revenue flowing into it has increased as well.
GELLERMAN: And now the Bush Administration wants to keep the Highway Fund afloat by borrowing from the Mass Transit Account.
CONKEY: Yeah, they put forward that idea, it doesn’t seem to have any legs in Congress. A lot of people say that this isn’t time to be taking money from the Mass Transit Account, which over time itself may face a shortfall as well if people pull back on driving unless Congress comes up with another way to fund it.
GELLERMAN: The roads are in awful condition you write that what, 25 percent of the nation’s bridges are basically obsolete or structurally deficient?
CONKEY: A little bit over 25 percent of the nation’s bridges are classified as either structurally deficient, as was the Minnesota bridge that collapsed last year, or functionally obsolete. You know, a lot of bridges that are designated as such are still open and can still handle traffic but the bottom line is that just, it’s just a lot that the nation’s transportation department’s have to worry about and keep a closer eye on, and spend more on maintenance, and consider replacing. And you know, this is just going to go up and up because our infrastructure, and our bridges especially, are you know, many of them are 80, 100 years old.
GELLERMAN: So where’s the money coming from?
CONKEY: Well that’s a good question. You know, bridge money comes out of the highway accounts as well and there’s been efforts in Congress to boost that amount. The House passed a bill that would steer about a billion dollars extra next year to go specifically towards bridge repair. And Jim Oberstarr, who chairs the House Transportation Committee and is from Minnesota, he last year floated the idea of raising gas taxes by five cents to fund a couple million more dollars to go to bridge repair as well. That went nowhere given what gas prices are doing. And raising the gas tax remains kind of problematic right now even though a lot of people say that’s what has to happen to really get our funding boosted right now.
GELLERMAN: Boy, talk about a bridge to nowhere.
CONKEY: Yeah, exactly.
GELLERMAN: What about this, I’m reading in your article that the Bush Administration is calling for new highway tolls?
CONKEY: Yeah, well the Bush Administration really loves the idea of tolling. The reason is that they really have a real problem with the way the country right now collects gas taxes, sends it to Washington, then it’s kind of doled out in a little bit of a political way and it also opens the door for earmarking and pet projects that don’t necessarily go to you know reducing congestion or attacking really the big transportation problems the country has. So they love the idea of tolls because it’s a really direct way to finance something. You know if you’re driving on a road, and you’re paying a toll on that road, you are using it and you’re paying a user fee and it’s not being diverted anywhere else, it just goes to pay off a road that’s been financed or something like that. So I think they view it as a little more equitable way too to get people to pay for the roads they use and to not force people who maybe are buying a shirt at a department store to pay a sales tax which is then diverted to this or that. You know, I’d say they really like the economics behind it.
GELLERMAN: You know these E-Z Passes, these transponders you can get for your car to kind of drive through a toll?
GELLERMAN: Do you ever see a day when you’ll drive out of your driveway and the minute you hit the road you’re being charged?
CONKEY: Everyone is saying this is where we’re heading in the future. Oregon did a study that was ordered up by the last transportation bill that was signed in 2005 in Congress that looked at something called a “Vehicle Miles Traveled Tax.” And basically it’s putting some kind of technology or transponder in your car and it’s recording everywhere you drive, how many miles you drive, and periodically, I believe when you fill up for gas, that information would get uploaded to some federal computer somewhere and you would get taxed based upon how much you have driven, not, as we are now, based upon how much gas we’re buying. So with the gas tax really looking problematic going forward if people are not going to be spending as much on gas, and you know we may be different fuels and we may be using electric cars you know in five, ten years, they’re viewing something like this as another direct way to measure you know how much wear and tear you’re causing on the roads, how much you’re driving. And this seems to really be splitting in a bi-partisan way, everyone seems to say this is something that’s gonna happen in the future. It has privacy issues, as you might imagine, but those’ll probably be hashed out a lot in projects that are going to go forward in the next couple of years.
GELLERMAN: Well Chris thanks a lot, I really appreciate it.
CONKEY: No problem Bruce.
GELLERMAN: Christopher Conkey reports on transportation issues for the Wall Street Journal in Washington, DC.
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