NCPA - National Center for Policy Analysis


November 20, 2006

Frustration over traffic gridlock and inadequate gasoline-tax funds are prompting state and local governments to try alternative ways to finance road building, says Larry Copeland in USA Today.

Americans spend 3.7 billion hours a year stuck in traffic delays, according to the Texas Transportation Institute's study of 85 metropolitan areas. Yet road and transit projects are languishing across the country because there's not enough money to pay for them.  The shortage has a number of causes, says Copeland, including:

  • The 18.4-cent-per-gallon federal gas tax -- which has funded major road projects since 1956 and transit projects since 1983 -- was last raised in 1993 and has not kept pace with inflation. 
  • The growing popularity of fuel-efficient cars and hybrid vehicles means that many Americans are buying less gasoline, further limiting gas-tax revenue.

As a result, states and cities are testing new ways to finance road maintenance.  For example:

  • A pilot program in Oregon equips vehicles of volunteer motorists with Global Positioning System devices; instead of paying the state gas tax, drivers pay a flat fee for in-state miles traveled.
  • New Jersey and Washington are among several states considering new forms of tolls. One is "congestion pricing," which charges motorists more for using highways during rush hour.
  • States and cities are looking at turning over the operation of some roads to private companies under long-term contracts; Indiana reaped $3.8 billion for a 75-year lease of its 157-mile toll road.

Source: Larry Copeland, "Motorists face new costs for highways," USA Today, November 20, 2006.

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