Gasoline Tax Shaky as Consumption Hits 30-Year Low

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DALLAS — The average fuel consumption of American motorists has fallen to its lowest level in at least 30 years, primarily because of more fuel-efficient vehicles, according to a report from the University of Michigan's Transportation Research Institute. The decline makes it less likely that federal gasoline and diesel taxes can sustain highway and transit funding over the long-term.

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According to UM research professor Michael Sivak, 392 gallons of fuel was used per capita in 2013, compared to 400 gallons per capita in 1984.

Average per-driver fuel use in 2013 was down 16% since 2004, the year of highest U.S. gasoline consumption, and total national fuel use was down 11% despite an 8% population growth over the past decade, Sivak said.

"The improvements in vehicle fuel economy over the past seven years are noteworthy, especially in relation to the [few] improvements during the preceding eight decades," Sivak said. "The reductions in the fuel-consumption rates reflect, in part, the added contribution of the improvements in vehicle fuel economy."

In 2013, the 392 gallons of fuel used per capita in the U.S. was down 17% from the peak in 2004, the 583 gallons used by the average motorist was off 16%, and the 524 gallons per vehicle was down by 14%, the report said.

The average household used 1,011 gallons of gasoline in 2013, down 19% from 2004. In 1984 the average fuel consumption was 400 gallons per person, 608 gallons per driver, and 602 gallons per vehicle.

"Overall, the combined evidence from this and the previous studies indicates that per person, per driver and per household, we now have fewer light-duty vehicles, we drive each of them less, and we consume less fuel than in the past," Sivak said. "There is no evidence in the 2013 data that the peaks in the rates that we experienced about 10 years ago were temporary."

The average vehicle's fuel economy increased by 5.3 miles per gallon between 2007 and 2014, Sivak said. Just over 25% of new cars purchased in the U.S. last year were rated at less than 20 miles per gallon, compared to more than half of new cars in 2008.

Although economic factors likely contributed to declining rates of vehicle ownership and distances driven, societal changes such as increased telecommuting, use of public transportation and urbanization of the population, along with changes in the age composition of drivers, have influenced the need for personal transportation, Sivak said in the report issued late last month.

The federal gasoline tax of 18.4 cents per gallon and the diesel tax of 24.4 cents account for most of the revenues that flow into the Highway Trust Fund. States levy a gasoline tax averaging 30 cents per gallon.

Revenue from federal fuel taxes fell by $15 billion a year from 2002 to 2012, with state fuel tax revenues down $10 billion a year over the same period, according to the Pew Charitable Trusts.

The latest projection by the Congressional Budget Office expects fuel tax revenues of $39.6 billion for the HTF fiscal 2015, with collections increasing incrementally to $40.1 billion by fiscal 2021. The Federal Highway Administration said HTF revenues in the first six months of fiscal 2015 totaled $15.8 billion while reimbursements from the HTF to states for highway and transit projects totaled $18.2 billion.

An economic analysis of vehicle ownership costs released last week by the American Road and Transportation Builders Association found that the average motorist that drives 11,400 miles per year pays $97 annually in federal fuel taxes, compared to $1,115 for insurance and $669 in car loan finance charges.

Four states - Iowa, South Dakota, Idaho, and Utah - have raised their gasoline taxes in 2015, part of the $1.48 billion per year of new state transportation funding approved this year by lawmakers.


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