These are hard days for Reaganomics. The country has discovered the terrible cost of failing to regulate the financial services industry. Soon it will wake up to the terrible cost of failing to maintain the transportation infrastructure.
The Federal Highway Trust Fund is broke. Fifteen years of neglecting to raise the federal gasoline tax has so flattened revenues that the backlog on bridge and highway repairs has reached a critical point — a point where, as Minnesotans know, bridges might even fall down.
A stagnant tax rate on gasoline isn’t the only problem. As fuel prices rise, people drive less, buy less gas and pay less tax. The move to fuel-efficient cars, including hybrids, also lessens the revenue flow.
An exhaustive report commissioned by Congress revealed that governments at all levels should be spending about $225 billion a year on maintaining and building roads, transit, rail lines and other surface projects. Governments currently are spending about $90 billion. In other words, the country must find a way to increase its infrastructure investment by 2½ times in order to catch up.
How can that possibly happen?
“We can’t depend on gasoline taxes exclusively,” said U.S. Transportation Secretary Mary Peters as she helped dedicate the new I-35W bridge in Minneapolis. “We’ve got to find a new and better way.”
The University of Minnesota’s Humphrey Institute has been looking beyond the gas tax for ways to charge road users for road expansion and repair. The institute this week offered a forum on a German practice of levying electronic, distance-based tolls on heavy trucks for the wear and tear they impose on the Autobahn system and the pollution they cause. The more kilometers the trucks travel, the more euros they pay. The distance charge is levied in addition to a fuel tax that makes German motor fuels cost the equivalent of about $9.50 per gallon.
Half of the money goes into roads and the other half into rails and waterways as part of a push to shift freight to less polluting modes of transport.
The tolls are set so that heavier and dirtier trucks pay more. Altogether, the truck tolls raised $5.3 billion last year, more than enough to cover shortfalls in the German transportation budget. It’s anticipated that eventually Germany will expand the tolling system to cars and light trucks.
When the next U.S. transportation law emerges as early as next year, it may include an opportunity for a pilot project on distance-based tolling, and the university is interesting in offering Minnesota. No one on a panel of seven responders rejected that idea. But they were hardly enthusiastic about the prospect of the pubic accepting a user-pay system for driving. The gas tax seems embedded in the price of fuel. A toll, whether collected at a booth or charged electronically, has never been a popular idea in Minnesota.
Rep. Bernie Leider, the DFLer who chairs the House Transportation Committee, has been thinking for 15 years about a mileage-based driving tax. But he has always expected that it would substitute for the gas tax, not add to it. The idea would be to make a driving tax a more reliable revenue source, not one that would necessarily raise vast new revenues. And, he said, it would be a “hard sell” if it applied only to trucks and not to all vehicles.
The problem with a revenue-neutral driving tax, however, is that it wouldn’t raise the huge amounts needed for infrastructure. So what’s the point?
Jeremy Estenson, director of government relations for the Minnesota Trucking Association, seemed most unhappy with the German approach, complaining most about distributing half of the proceeds to rail and waterways. “What’s collected on the roads should stay on the roads,” he said.
Others, however, said that transportation in a new century must now be seen as a whole: moving people and goods by the best, cleanest and most efficient way possible.
Therein lies, perhaps, the biggest advantage for Minnesota. When adopted, a mileage-based system will circumvent the archaic and damaging constitutional prohibition on using gas taxes for transit and other modes. Perhaps the best feature of the German model is its incentive to shift traffic to cleaner, more efficient means of transport.