Lawmakers, researchers look to future without gas tax

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A standalone gas tax just won’t make the cut to meet infrastructure needs, and ideas are shifting to mileage-based charges and new taxes on oil producers.

This week, two members of the House Committee on Transportation and Infrastructure, Reps. Paul Mitchell, R-Mich., and Salud Carbajal, D-Calif., proposed phasing out the gas tax in favor of an alternative tax on producers per barrel of oil and per 1,000 cubic feet of natural gas.

“To move things forward, we need bipartisanship on a sustainable revenue solution to fund our ongoing infrastructure investments— that's what my Republican colleague Rep. Mitchell and I are pushing for,” Rep. Carbajal wrote in a statement to The Bond Buyer. “If we can't agree on increasing the gas tax, there are other solutions that can get the job done."

Revenue from the new taxes would be dedicated to a new proposed federal Infrastructure Investment Fund, which would support federal highways, waterways and safety efforts and then block grant the remaining funding to states, the lawmakers wrote in an opinion article in The Hill.

Mitchell and Carbajal both believe that the best way to tackle infrastructure is at the state and local levels to better meet individual needs.

“We really need to use the laboratories of democracy, the 50 states, as a way to see who comes up with a way that is a genuine good value proposition for both individual drivers and trucking companies where they get something out of this and see it as a good solution,” said Robert Poole, director of transportation policy at the Reason Foundation.

Many states and localities rely heavily on federal support for their infrastructure needs, and say they need reliability from the federal government so they can plan their own capital programs and make decisions such as how much debt they will need to issue to support those programs.


Poole recently wrote a report detailing how states could transition from per-gallon taxes to mileage-based user fees to fund the Highway Trust Fund.

The Highway Trust Fund is running on fumes because of a federal gas tax that hasn’t been raised in over 20 years, and it is being further depleted by more fuel-efficient and alternative fuel vehicles that require less fuel for the same miles traveled.

This summer, the Senate Environment and Public Works Committee approved a reauthorization of the Highway Trust Fund after Sept. 30, 2020. The bill would authorize $287 billion in federal surface transportation spending over five years.

Poole pointed to an interest in tolling to finance rebuilding interstate highways, which could be a first step in charging per mile. Analysts recently reported that express lanes drove in more revenue than expected.

“That would be a big start in my view, and get people used to the idea that fuel taxes are wearing out along with many of the highways and need to be replaced with a per mile charge,” Poole said.

In 2015, Oregon authorized a voluntary program for 5,000 people to opt to pay a per-mile charge instead of the state fuel tax. Revenue was then dedicated to highway and bridge purposes. As of 2019, it became the only state to implement a statewide transition to per-mile charging after lifting the 5,000 person cap in June.

Poole said the beginnings of a mileage-based user fee depend on who takes the lead.

“I think it’s inevitable eventually in some form,” he said.

The American Association of State Highway and Transportation Officials has an ongoing list of alternatives to fund infrastructure through gas taxes to drivers license registration fees to freight charges. In the end, AASHTO doesn’t want to tell Congress to go for one option or another.

“We’re saying that however you want to do it, it’s really up to the lawmakers to decide, but the evidence is clear,” said Tony Dorsey, AASHTO spokesperson.

“Something has to be done, because the Highway Trust Fund is in serious trouble, and if we don’t get it fixed before 2020, before the FAST Act expires, we’re going to be in a very bad situation,” Dorsey said, referring to the Fixing America’s Surface Transportation Act.

It is not clear when Mitchell and Carbajal might file legislation that would make their idea a reality.

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Infrastructure Transportation industry Highway trust fund AASHTO Washington DC
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