(Via, See also) So, for the second year in a row, the highway trust fund will face the prospect of going broke, which will mean a large infusion of general funds — about $7 billion — authorized by the Congress. The dynamics here are very simple. The gas tax has declined steadily in real terms, and over the past two or three years, driving and gasoline consumption themselves have fallen, primarily because of record high gas prices, but also because of changing tastes and demographics and increasing congestion. Given the various externalities associated with driving and burning gas, it should be clear that reduced driving and gas consumption are good things, to be encouraged. Given the economic damage sustained by high oil prices last year, it again seems clear that reduced gas consumption is a good thing.
So here’s the situation in which we find ourselves. We don’t have enough money to pay for the transportation projects we want. Our choices, then, are to raise more money or spend less on transportation projects. Since basically everyone in the country agrees that we need to spend more on transportation projects, it sure seems like we need to raise more money. Ideally, we’d also do so in a way that would reduce gasoline consumption and other driving externalities.
I don’t know how one gets around the conclusion that higher gas taxes are needed, along with a move toward congestion tolling. I don’t know why one would want to get around that conclusion; it’s the right conclusion! If for some bizarre reason the Congress decides that a VMT tax is actually the smart way to approach this problem, then I suppose that’s something, and if it provides the infrastructure funding we need, then I’ll accept it. Seems like an awful lot of trouble to go through when you could just start making the point that:
1) In real terms, gas taxes have been falling for over a decade.
2) Gas tax revenues need to be increased to pay for desperately needed investments.
But you know, Congress seems increasingly incapable of making difficult but necessary decisions. I’m not holding my breath or anything, in other words.