1. Moving Away From The Gas Tax
Price Armstrong
Program Manager
Massachusetts Bicycle Coalition
11/9/2018

2. Presentation Structure
My Train of Thought
Gas Tax as User Fee
General Fund Contributions
Public Goods
Politics of the Gas Tax
Potential Models
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3. My Train of Thought 2010 TRB Finance Conference
Bill Ankner in the “Provocateur” session
Description of TransLink funding structure
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4. Gas Tax As User Fee Short History
1919 – Oregon institutes the first gas tax
1932 – Federal government institutes a gas tax for the purposes of deficit reduction
1956 – Federal Aid Highway Act dedicates the gas tax to the highway trust fund
1982 – “Transit Account” created, receiving $0.01 of the gas tax
1990 – Under the Omnibus Budget Reconciliation Act (OBRA), the gas tax was increased with half of it going toward deficit reduction
1991 – ISTEA passed, broadening the potential uses of gas taxes to fund transportation projects
1993 – OBRA again raised the gas tax to the $0.184 that still exists today
Today – Gasoline and diesel taxes account for 90% of federal highway funding and 80% of federal transit funding.
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5. Gas Tax As User Fee
Short History
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6. Gas Tax As User Fee
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7. Gas Tax As User Fee
Ronald Reagan raised the gas tax by five cents. He said, “Our country's outstanding highway system was built on the user fee principle—that those who benefit from a use should share in its cost.”
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8. General Fund Transfers
The Highway Trust Fund has received multiple general fund transfers over the past few years:
$8 billion
$7 billion
$19.5 billion
MAP-21: ~$20 billion
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9. General Fund Transfers
GAO Report 2011: “All States Received More Funding Than They Contributed in Highway Taxes from 2005 to 2009”
Ironically, they also write, “The program operates on a “user pay” system, wherein users contribute to the Highway Trust Fund through fuel taxes and other fees.”
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10. General Fund Transfers
Potential solutions to the struggling trust fund:
Raise the gas tax
Raise other taxes
VMT fees
New tolling
Innovative financing
- PPPs
- Infrastructure Bank
Reduce funding
Cut programs OR
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11. General Funds - Public Goods
Public Health
Environment
Equity
Economic Resilience
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12. Public Goods – Public Health
Obesity has overtaken smoking as the #1 cause of death in the US
Obesity cost $147 billion in 2008
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13. Public Goods – Environment
Climate Change
Hurricane Sandy may cost $50 billion
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14. Public Goods – Environment
Air Quality
After I-405 closed for three days in LA, air quality almost immediately improved
Ultrafine particulate matter dropped 83%
Larger particulate matter dropped 36%
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15. Public Goods - Equity
On average working class families pay 60% - 70% of their income on housing and transportation.
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16. Public Goods – Economic Resilience
High gas prices were correlated with higher foreclosure rates in 2008
Rationale for “Location-Efficient Mortgages”
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17. Politics Of The Gas Tax Of American voters:
71% oppose increasing the gas tax
58% oppose replacing the gas tax with a VMT fee
64% oppose adding new tolls
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18. Politics Of The Gas Tax American Energy and Infrastructure Jobs Act
Eliminated long-term transit funding
Eliminated most bike/ped funding
The proposal also identifies programs that do not serve a federal interest, such as the National Historic Covered Bridge Preservation Program and the Nonmotorized Transportation Pilot Program, and eliminates them.
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19. Politics Of The Gas Tax
2010 – Greg Cohen, CEO of American Highway Users Alliance, wrote, “I’m always amused when advocates of non-highway modes and other direct beneficiaries of motorist fees, earnestly and seriously sit before Congressional committees, declaring their support for increased user fees on motorists and truckers. Even more amusing is the common response, ‘How big an increase do you want?’”
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20. Status Quo, with more money
Potential Models
Status Quo, with more money
Raise the gas tax, maintain the HTF
Formula funding for highways
(Mostly) competitive grant funding for transit
Myriad smaller programs with dedicated funding
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21. (Multiple Trust Funds)
Potential Models
All User Fees
(Multiple Trust Funds)
Figure out what it would cost to maintain the systems and then price the fees accordingly:
Example:
Highways – Fuel tax or VMT fee
Transit – Fare surcharge
Bike/Ped – Tire/shoe fee
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22. All Dedicated Funding #1
Potential Models
All Dedicated Funding #1
Figure out the tax model, and the formulas for funding the various modes:
Example:
Highways – 78%
Transit – 20%
Bike/Ped – 2%
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23. All Dedicated Funding #2
Potential Models
All Dedicated Funding #2
Figure out the tax model, and the criteria for funding transportation projects:
Example:
Mobility Improvements
Air Quality Improvements
Reduction in GHG emissions
Promotion of Smart Growth
Promotion of Active Transportation
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24. Potential Models Status Quo #2
Let the gas tax dwindle, and the General Fund contributions increase.
However, allocate General Fund contributions based on performance criteria.
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25. Questions?
Price Armstrong Program Manager Massachusetts Bicycle Coalition (617)
11/9/2018