How To Pay For Surface Transportation Infrastructure

Below is an excerpt from the interim report by the National Commission on Surface Transportation Infrastructure Financing. While they haven't made any specific recommendations about how to fund the increasing demand for infrastructure upgrades, present taxation methods are clearly inadequate.

Vermont should consider new approaches to funding infrastructure, too. Increasing the level of taxation on a diminishing commodity, fuel, will not produce the long term revenue needed. Novel approaches are suggested to move the basis for taxation to usage of roads, instead of the surrogate of fuel, because fuels will be supplanted by electricity in the future.

One could tax electricity, I suppose, but determining which electricity is used for recharging vehicles is problematic.

One intriguing proposal would tax vehicle mileage directly with different rates for different weights and vehicle types presumably using an on-board metering system that automatically recorded and transmitted miles driven (and where?) using GPS technology. This seems like a good solution if (a BIG if) the privacy wonks can be satisfied.

"It is important to note that innovations in information technology are enabling new pricing strategies across all modes of travel. Technologies that can establish variable use rates based on time of day, type of vehicle, level of emissions, and specific road traveled are being deployed around the world. For example, on the federal highway system in Germany, heavy trucks are equipped with transponders and GPS systems and use an automatic toll collection system based on truck weight, level of emissions, and distance traveled. Transportation officials in the Netherlands are planning to transition to a satellite-based system that would charge drivers based on vehicle miles traveled (and potentially other factors, such as congestion)."

Perhaps Vermont should plan to be an early adopter of this system which would take years to implement. It makes the most sense in the long run.

"We provide in this report the criteria by which we plan to evaluate various funding sources and financing techniques. We describe the broader surface transportation system issues and challenges that provide the context for examining possible funding recommendations. And we sincerely invite stakeholder feedback on all aspects of our approach in order to help us develop constructive and specific recommendations that will support our nation’s future transportation needs.

Finally we identify some preliminary observations and invite comment on them as
well. In brief:

• System demands are outpacing investment;

• System maintenance costs are competing with necessary expansion of the system;
  

• The fuel tax, which has been the key federal funding source for our system, is no longer sufficient at current rates;
  

• More direct user charges should be explored; and We need not only more investment in our system, but more intelligent investment complemented by better operation of the system.

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