Commission Urges Taxing Drivers More

March 16, 2009

Commission Urges Taxing Drivers More

By Christopher Conkey

WASHINGTON — The government should make it a lot more expensive for Americans to drive and should install devices in cars that levy a fee for every mile traveled, according to a report being released Thursday by a congressionally chartered commission.

The report lands in the middle of debate over how to pay for roads and other transportation projects and recommends an array of potentially controversial increases in the cost of driving.

Among the proposals: raising the 18.4 cents-a-gallon federal gasoline tax by 10 cents, or 54%, and then indexing future increases to inflation. The study estimates that would cost American households about $9 more a month. The plan also calls for adding 15 cents a gallon to the 24.4 cents-a-gallon tax on diesel fuel.

[re-paving the way]

Longer term, the study calls for shifting away by 2020 from a fuel-tax system to a technology-enabled system that levies taxes based on how many miles people drive.

The Obama administration has expressed opposition to increasing gasoline taxes and to the idea of taxing motorists per mile driven.

The recently passed stimulus bill devotes more than $45 billion to transportation projects, but officials say significant cuts in other transportation funding are in store. Last year, Congress temporarily patched an $8 billion shortfall caused by a slump in fuel-tax revenue after Americans cut back on driving as the economy slowed and fuel prices surged.

The Obama administration has said the current gas-tax structure is becoming obsolete but it hasn’t put forward any fix, saying it will consult with Congress this year before taking action.

“The situation we’re faced with on surface transportation…is complex, difficult and important. … We’re looking at every option,” said Bill Adams a spokesman for Transportation Secretary Ray LaHood. “We’re not going to be ready overnight.”

The bipartisan National Surface Transportation Infrastructure Financing Commission began studying the transportation-funding problem two years ago at the behest of Congressional leaders. Congress often uses such commissions to generate ideas for solving politically touchy problems.

The commission’s report says if current policies aren’t changed, the gas tax and other federal revenue streams will generate about $32 billion annually in the years ahead, far below the $100 billion required to address the nation’s transportation needs.

In addition, the commission says the government should make it easier for states to put tolls on all sorts of roads, including those that are currently free. It also says private interests should be encouraged to invest more in transportation projects.

Private investors are pushing Congress to give businesses a greater role in funding transportation projects, as Australia, Canada and many other countries have. In his confirmation hearing last month, Mr. LaHood signaled interest in allowing private firms to construct or manage more of the nation’s highways and other infrastructure. His spokesman declined to comment directly on the issue Wednesday.

“There’s an awful lot of private-sector money that’s waiting to go into infrastructure,” said Christopher Lee, founder and managing partner of Highstar Capital, a New York-based private-equity firm. Highstar says it has invested $6 billion in ports and other infrastructure over the last two years, including its acquisition of U.S. properties previously owned by Dubai Ports World. “The U.S. could do a better job of accessing that capital.”


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