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ATRI research suggests an increased gas tax for USA’s infrastructure investment shortfall

The USA trucking industry’s not-for-profit research organization, American Transportation Research Institute (ATRI), has released its much-anticipated assessment of the country’s transportation investment options, with an increased gas tax the leading choice.

The report, A Framework for Infrastructure Funding, concludes that the only meaningful mechanism for attaining the administration’s vision for a large-scale infrastructure program is through a federal fuel tax increase.

The inefficiency of other mechanisms, including mileage-based user fees and increased tolling, will fall far short of the needed revenue stream without placing undue hardship on system users. The ATRI research documents that a federal fuel tax increase will incentivize states to generate multi-million dollar matches to the new federal funds, ultimately moving the USA closer to the infrastructure investment goals proposed by both Congress and the President.

The report further documents the consequences of continuing with the ‘do-nothing’ option. The federal fuel tax has not been raised in more than 20 years, resulting in significant costs to system users, particularly the trucking industry. While the haulage industry contributes more than US$18bn in federal user fees each year, growing traffic congestion and freight bottlenecks now cost the industry more than US$63bn annually. The report also indicates that growth of e-commerce will likely slow as freight deliveries fail to meet the real-time demands of consumers.

Other key findings and recommendations include:
• A newly created federal vehicle registration fee would be the most efficient mechanism to fill funding gaps associated with electric vehicles (EVs), implemented using the same systems that collect state registration fees;
• A bureaucracy as large as the IRS would be required to collect, manage and enforce a national vehicle miles traveled (VMT) tax on the USA’s more than 250 million registered vehicles, with evasion likely to skyrocket under a program that cannot ‘see’ non-paying users;
• Road tolling continues to be an expensive proposition for collecting highway funds, with the majority of operators spending more than 10% of fees on administration and many losing money, while most privatized toll roads have filed for bankruptcy;
• According to the literature and public polling data, US taxpayers prefer a federal fuel tax over other funding mechanisms when the revenue is dedicated to transportation infrastructure.

Chris Spear, ATA president, commented, “ATRI’s research corroborates what many of us have espoused in Washington DC and in every state capital – people are demanding action on transportation investment, and the federal fuel tax is the ideal tool for delivering the much-needed funding.”

November 9, 2017

Written by Adam Frost

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