Are There Any Questions?

Are there any questions associated with the unsustainability of the gas tax?

Those were the 12 provocative words with which Steve Morello of D’Artagnan Consulting closed a portion of his presentation to the IBTTA Leadership Academy last week. It was phrased so innocently. But to anyone present, Morello’s question hit home with the impact of brass knuckles inside a velvet glove.

Morello, chief meeting organizer for IBTTA’s Transportation Finance and Mileage-Based User Fee Symposium in mid-April, had just finished an overview of an escalating, global crisis in highway funding. Taking trends in Oregon as his point of departure, he traced a 35-year span ending in 2006, in which:

• Populations rose steadily
• Vehicle miles traveled (VMT) grew much faster than population
• Gas tax revenues fell.

Oregon was an interesting place to ground the analysis, a jurisdiction that launched a major pilot project on VMT charges and has taken a keen interest in VMT experiments elsewhere. And with good reason: With tougher fuel efficiency standards and the growing popularity of hybrid-electric vehicles, Morello said the state’s gas tax revenues can be expected to fall 37% by 2016 and 60% by 2025.

In his Leadership Academy presentation, Morello pointed to Oregon as a microcosm for the development of alternate approaches to highway financing, across the United States and around the world—from New Zealand’s distance-based road usage charge, to the time-based sticker systems in Europe, to the 20 weight-distance taxes that existed in the U.S. as recently as the mid-20th century. The bottom line is that new financing mechanisms are proposed and studied much more often than they’re implemented, while highway financing worldwide drifts further into deficit.

Morello was addressing a group of the tolling industry’s emerging leaders, but his provocative question would have been just as pertinent—and pointed—with any of the other stakeholders or decision-makers with a say in the future of transportation infrastructure financing:

Are there any questions associated with the unsustainability of the gas tax?

If there are, we’d better get them out in the open, where they can be discussed and resolved. The public is counting on us (all of us) to solve this problem, and there’s no time to waste.

Click here to download a copy of Steve Morello’s presentation to the IBTTA Leadership Academy.