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Column: Raise the Gas Tax and Then Abolish It

The federal Highway Trust Fund, which helps pay for transportation projects all over the country — non-highways included — now looks as if it will run out of money in August. That timeline sets up another last-minute, high-stakes confrontation in Washington over how to replenish an essential program that supports construction jobs, local economies and basic repairs.

We’ve been careering toward this moment since about 1993, when Congress last raised the gas tax that provides the fund’s revenue. For a variety of reasons, though — Congress’ inaction is a big one — today’s 18.4-cent-per-gallon tax does a terrible job of covering our transportation needs. Now the fund needs a short-term patch, a sustainable solution for the next several years and then probably a radically different approach.

Nine-term Rep. Earl Blumenauer, D-Ore., who sits on both the House Budget and Ways and Means committees, has been advocating for all three. He introduced a bill in December to raise the gas tax by 15 cents (that’s less than a plan currently on the table). But his long-term vision — shared by many transportation wonks — looks dramatically different: “I am working very hard for Oregon, which gave you the first gas tax, to pioneer getting rid of it,” he told me.

I sat down with him recently to talk about why people hate the gas tax so much, what Congress is likely to do about it this summer and how we might fund transportation in entirely new ways in the future. Below is an edited transcription of our conversation.

Q. Why has the gas tax been such a uniquely difficult thing to deal with? Congress has tackled any number of big problems in the last 21 years. But repeatedly, this has not been one of them. Why is that?

A. For the first 80 or so years of the fund, the receipts increased because the American population grew, and we were driving more and more and more and more. It started running into trouble in the last 20 years for two reasons: One is that gasoline is the only product that we price in real time. The typical American sees the price of gasoline about five to 20 times a day, if they pay attention at all.

You don’t see changes in the price of bread or milk, in the same way. This is in your face. And over the course of the last 30 years, particularly over the last 10, gasoline prices have been extraordinarily volatile. Oil prices even more so. This triggered some resentment or anger. The combination of the volatility of the pricing, and the fact that it’s in your face made people resistant. It’s not a favorite tax.

And it wasn’t necessary until recently to talk about increasing it because it did have a natural growth.

Now we have seen several things come into play: The growth in vehicle miles traveled has actually declined for nine consecutive years. The increase in fuel efficiency has been pretty dramatic. And then we’ve got highway construction costs that have not been declining. As a result of the combination of inflation, fuel efficiency and changing driving patterns, we’ve got a Highway Trust Fund that is in a tailspin. According to the AAA, the average motorist is paying half per mile of what they paid in 1993 to use the roads.

Q. That implies that the gas tax no longer functions as what it used to — as a user fee.

A. We have to make a transition into something that is use-based. The gas tax used to be a very good approximation for road use. And that relationship between road use and the gas tax has been shattered.

With greater fuel efficiency, hybrids, plug-in hybrids, electric cars, hyper-efficient diesel, people who are putting the same amount of wear and tear on roads and occupying space and creating congestion have wildly different payments that they make through the fuel tax.

Q. Last December, you introduced a bill modeled off a Simpson-Bowles recommendation that would increase the gas tax 15 cents, over three years, and then index it to inflation. But part of your proposal included expanding a pilot program Oregon has been running for the last decade to replace the gas tax altogether with a “vehicle miles traveled” tax that functions much more like a user fee — a tax motorists would pay based on how many miles they actually drive, not how much gas they consume. Can you explain how Oregon’s pilot works?

A. We started in Oregon with a monitoring process. People are interested, it’s technically possible, and it changes driving behavior. When people were aware that they were being charged per mile — and they were aware of the miles that they drove — they drove less.

But one of the elements that came out of the first pilot study was that people were a little uncomfortable with monitoring where they went. It’s ironic that people are self-conscious about that, because with a smartphone, The Man knows where they are. These are people who are tweeting and posting pictures. And we are transforming automobiles into computers on wheels that are keeping track of this stuff anyway. In the second variation (of the pilot), we gave people a choice, because we really don’t care where they go. We care how far they go. So people could choose — they could do it with an app for a smartphone, they could use an on-board navigation system. They could do it the old-fashioned way when they go for an annual inspection and just have an odometer reading. Or you could pay a big fat, flat fee.

When people were given those choices, it really smoothed things out, and it let them tailor it to what they wanted. What we’ve proposed is that this pilot project be extended to every state on a voluntary basis.

According to GM and Verizon, the technology is there to make this transition. It could be done in months. They’re ready to go. The public’s not yet ready to go. So we need to have a fuel tax increase to be able to have a robust six-year reauthorization, and we need another year or two or three of experimenting, raising the comfort level, giving people choices.

The other thing that is so powerful about the VMT technology is that we’ll be able to help drivers do a lot more than just conveniently pay for their road use. The same technological platform will enable people to get real-time traffic information. The seamless payment that’s debited to an account to pay for road use could also be used to pay for a transit ticket, or an Amtrak ticket, or an application they can use to pay for parking.

Emily Badger covers urban policy for The Washington Post.