N.J. joins the parade as states test mileage-based fees
Lisa Washburn, managing director at Municipal Market Analytics, noted that future prospects for gas taxes as the main driver for transportation funding are dim because of increased electric and hybrid vehicle use coupled with many politicians reluctant to raise rates. The federal tax rate has not been raised since 1993 and while President Trump endorsed a 25-centfuel hike last year for his proposed $1.5 trillion infrastructure bill, congressional republicans quickly balked at the idea.
“There are a lot or negative views of the gas tax and that makes it hard to raise frequently to address infrastructure needs,” Washburn said. “It’s like a third rail tax.”
Washburn said the mileage-use fee is an idea that has potential to work in northeast states such as New Jersey if drivers can see linkages between their vehicle usage and the importance of improving the roadways on which they travel. Some possible complications would need to be addressed, according to Washburn, such as how to determine mileage-fee program credits for gas taxes and making sure that those with more fuel-efficient or electric vehicles don’t get adversely affected from the change. She added that assurances about privacy concerns with data collected would also be important, especially with trying to attract older participants.
“Looking for an alternative to the gas tax for funding infrastructure is very important,” Washburn said. “We have to find innovative ways to fund infrastructure and this certainly could be a very good way to shore up and make more sustainable revenues for infrastructure.”