BY MALIA ZIMMERMAN – If the federal government has its way, it may soon cost more to drive.
The U.S. Government Accountability Office report released this month on the nation’s Highway Trust Fund, which said all 50 states received more in highway funds than they paid in highway taxes from 2005 to 2009.
The fund, which helped to build 4 million miles of roads and 600,000 bridges, was augmented with about $30 billion in general revenues since fiscal year 2008.
However, the report says this system, where states get more than they pay in, is not sustainable in the long term. Part of the problem, the GAO said, is the federal gasoline tax rate has not increased since 1993, and cars are becoming more fuel efficient, which means less in gasoline taxes. The Congressional Budget Office forecasts another revenue shortfall in the Highway Account of the Highway Trust Fund by the end of fiscal year 2012.
That has spawned a federal debate over how additional money should be brought in, including over ideas from The National Surface Transportation Infrastructure Financing Commission on alternative approaches to the fuel tax, mileage-based user fees, and freight-related charges.
The report said: “Furthermore, transportation experts have noted that transportation policy needs to recognize emerging national and global challenges, such as reducing the nation’s dependence on imported fuel and minimizing the effect of transportation systems on the global climate. A fund that relies on increasing the use of motor fuels to remain solvent might not be compatible with the strategies that may be required to address these challenges.”
Another controversy brewing is how much money each state receives for every $1 paid to the federal government in fuel taxes, because it ranges considerably.
For example, Washington DC brought in $5.85 and Alaska brought in $4.99 for every dollar they paid in federal fuel taxes.
Several other states received allocations in the $2 range for every $1 dollar paid in fuel taxes, including Hawaii at $2.20, North Dakota at $2.58, South Dakota at $2.41, Vermont at $2.95, Montana at $2.71, and Rhode Island at $2.96.
The vast majority of the states brought in over $1 dollar, such as Texas at $1.03, Indiana at $1.07, Wisconsin at $1.27 and California at $1.19.
The allocations are used to pay for everything from highway construction, road and bridge repairs, and rail projects.
Federal funding for highways is provided to the states mostly through grants administered by the Department of Transportation’s Federal Highway Administration.
The “Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users” allocated $197.5 billion for the Federal-Aid Highway Program in 2005 for fiscal years 2005 – 2009.
The GAO said the program operates on a “user pay” system, with states paying into the Highway Trust Fund through fuel taxes and other fees.
However, it said the distribution of funding among the states has been a “contentious issue.”
“States that receive less than highway users contribute are known as “donor” states and states that receive more than users contribute are known as “donee” states. GAO was asked to examine for the SAFETEA-LU period (1) how contributions to the Highway Trust Fund compared with the funding states received, (2) what provisions were used to address rate-of-return issues across states, and (3) what additional factors affect the relationship between contributions to the Highway Trust Fund and the funding states receive.”