U.S. gas tax needs hike, overhaul: commission

WASHINGTON (Reuters) - U.S. drivers need to pay more gas taxes and new user fees to fix crumbling roads and bridges and ease congested highways, a transportation commission is set to recommend to Congress later this month.

Traffic flows at dusk with the downtown Houston skyline in the background as night falls on America's fastest growing large city in this file photo from October 3, 2008. REUTERS/Richard Carson

U.S. gasoline taxes should be raised 10 cents a gallon to help fund improvements, at least until new systems are created to charge drivers for how much they use roads, according to a draft copy of recommendations from the National Surface Transportation Infrastructure Financing Commission.

“We’ve basically had a 30-year experiment in this country in under-investing in surface transportation infrastructure,” said Robert Atkinson, president of the Information Technology and Innovation Foundation and chairman of the commission.

Atkinson said the gasoline tax hike combined with more aggressive use of tolls and “congestion pricing” would help cover those costs.

Some estimates say federal, state and local governments would need to spend about $80 billion per year more than current levels to begin to reduce congestion, improve roads, and expand transit, Atkinson said.

The commission will recommend that Congress implement the gas tax hike, a 15-cent increase in the federal diesel tax, as well as tax increases for other fuels as short-term measures to raise nearly $20 billion more each year than is currently collected, the draft report said.

The Highway Trust Fund, the federal government’s primary source for transportation infrastructure, is mostly funded through federal gasoline taxes.

The Surface Transportation Act, which includes the fund, is due for reauthorization by Congress this year.

Record high fuel prices and an economic slowdown caused sharp declines in driving by Americans in fiscal 2008, lowering the revenue collected for the fund, but federal highway spending rose $2 billion. The Highway Trust Fund took in $31 billion between October 2007 and September 2008, $3 billion less than the prior year.

As vehicles become more fuel-efficient, Americans will be able to drive more miles as they pay less in fuel taxes, making a highway maintenance system that depends on gasoline taxes unsustainable, said Adrian Moore, vice president at the Reason Foundation and a member of the commission.

Moore does not support raising fuel taxes, but said it is the only tool Congress can immediately implement.

“The gas tax is broken, so any increase in gas tax is just a Band-Aid. It gets you through a very short term. It doesn’t even remotely solve the problem,” Moore said.

Moore and Atkinson said America must shift to a system whereby Americans pay for the number of miles they drive instead of being taxed per gallon of gasoline. Under such a system people would pay more for driving in some areas such as heavily congested freeways and less in areas such as rural highways.

Americans pay an 18.4 cent federal tax on each gallon of gasoline they buy, plus an extra 29 cents on average in combined state and local taxes.

Reporting by Ayesha Rascoe, additional reporting by Roberta Rampton; editing by Richard Chang