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New Revenue Source Needed To Keep Highway System Working, Panel Says



Despite the Obama administration's unequivocal rejection of the idea, a federal transportation pane tasked with figuring out how to finance future highway construction and repairs is calling for institution of a vehicle mileage tax that would have drivers pay for each mile driven.


The National Surface Transportation Financing Commission also said in its final report, issued this morning, that the nation needs an immediate but temporary increase in federal fuel taxes, now 18.4 cents a gallon for gasoline and 24.4 cents a gallon for diesel fuel.


As the economy has tanked and fuel prices have risen, people are driving less and shifting from fuel-guzzling pickup trucks and SUVs to more efficient small cars and crossovers.


The result has been a dramatic decline of the fuel taxes that provide federal highway revenue. The highway fund last year sought, and obtained, an $8 billion infusion from Congress to remain solvent.


A mileage tax, the panel said, would replace the declining gas tax revenue that is supposed to cover the federal government's share of highway and bridge construction and maintenance costs. 


The panel is suggesting an average fee of 2 cents a mile, which means a motorist driving 15,000 miles a year would pay $300, regardless of the type of vehicle driven.


Today's gas-tax funding system means motorists pay varying rates depending on their vehicles' fuel economy but almost always are paying far less than the charge the proposed mileage tax would levy.
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Tags: Fuel Economy, Legislation, Tax Incentives, Gas Tax, Highway Financing Commission, Highway Fund, Mileage Tax

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Federal Highway Commission Urges Diesel and Gas Tax Hikes, Mileage Fees was originally published by Green Car Advisor. Read the full story by clicking here.