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November 22, 2017

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Bailing out highways

Congress should look at ways other than the gas tax to pay for upkeep of roads

The Obama administration said last week that by September the Federal Highway Trust Fund will need $7 billion to stay solvent.

Even if Congress this year shores up the trust fund — which pays for work on the nation’s highways and interstates — it’s not as if the problem will go away. The administration predicts the trust fund will need an extra $10 billion next year.

Money for the trust fund comes from the gas tax, which obviously has been insufficient. The federal government collects 18.4 cents per gallon of gasoline sold, and the tax hasn’t been increased since 1993. In addition, Americans are driving less and driving more fuel-efficient vehicles, which means fewer trips to the pump.

There are proposals in Congress to raise the gas tax. One would hike it 40 cents a gallon. Another would increase it by 10 cents for gas and 15 cents for diesel and tie future increases to the inflation index.

Some sort of an increase in the gas tax is needed, at least in the short term, to sustain the highway trust fund. Otherwise, Congress will have to borrow billions more for road projects. However, many experts have raised questions about the feasibility of the gas tax even with an increase. With the push for more fuel-efficient cars and public transportation, which would mean less revenue, the problems with the tax will certainly continue into the future.

The gas tax was created in 1956 to pay for construction of the interstate highway system, and it is clear there is a need for a change. Some states are experimenting with other ways to fund road construction. Oregon, for example, is running a pilot program to tax vehicle owners based on the number of miles they drive. That is an idea that lawmakers should consider as they debate the trust fund’s future.

The bottom line is that Congress should put the trust fund on a stable financial footing.

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