As mentioned in the March 2017 Wisconsin Section Newsletter, a major issue is how to pay for highway infrastructure improvements. The gas tax made some sense when it was initiated, but it was not indexed to the cost of construction and didn't anticipate improvements in fuel efficiency, demographic changes, and reduced driving patterns. It's time for a new funding mechanism for at least a major portion of highway funding and it should be user-based. The following isn’t fully developed, but it represents my general thoughts to date. The funding mechanism should have two main components - one user based and one from the general fund. The user-based component would be composed of four subparts:
1. Registration Fees
2. Miles-driven Fees
3. Tolls
4. Sales Taxes on Vehicle Purchases
The first three of those three should be based partially on vehicle weight & size, with maybe two categories for cars and three for trucks. In addition to vehicle weight, the rates could be based on a number of factors - miles driven, region driven, specific roadway, time of year driven, and other factors that influence the wear & tear caused by vehicles to pavements, and the cost of maintaining the highway system.
The miles-driven fee would be determined based on a transponder affixed to each vehicle. Some fear a loss of privacy, but most of us carry cell phones that constantly share a stream of far more data about our comings and goings than we realize and the vehicle transponder would add little new data to that stream. For those who truly refuse the transponder, their registration fee could be increased by some (large) flat fee. The transponders would only track miles driven within the state.
The tolls are largely to capture the cost of impact caused by out-of-state vehicles. Colorado has a pretty painless tolling system on at least one highway near the Denver airport. However, if the miles-driven fee and transponders could be established the federal level, then miles driven could be allocated among the various states in which the transponders recorded their travel.
In the first three user fees listed above, the cost of the vehicle is only an indirect factor. Some might object that fees based on the above criteria are not sufficiently progressive. However, user fees are intended to reflect the cost of use. And use often increases with wealth and as a result, the wealthier would pay a higher miles driven fee. To some extent, the sales tax component would inject a certain amount of progressivism into the funding mechanism although there’s not necessarily a correlation between vehicle purchase price and income level.
It seems appropriate that the general fund be used to cover some of the cost of highways, as the entire public benefits from a healthy highway system. The general fund component could be at roughly the same percent as transit is supported from the general fund.
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William Meyer P.E., M.ASCE
Senior Project Manager
Hanson Professional Services Inc.
Saint Louis Park, MN
(769) 259-5756
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