Transportation infrastructure is essential for economic growth. In order to maintain quality transportation infrastructure, sustainable funding is imperative. An Economic Commentary [PDF] by the Midwest Economic Policy Institute explores the role of the motor fuel tax both nationally and internationally. The United States currently suffers from insufficient funding due to a broken system. Without changes, more and more roads, bridges, and public transit systems will fall into disrepair.
The primary source of transportation funding in the United States is the motor fuel tax – also known as the gas tax or fuel tax. The federal gasoline and diesel taxes currently stand at 18.4 cents and 24.4-cents per gallon, respectively.
The revenue collected from federal fuel taxes is deposited into the Highway Trust Fund (HTF). While fuel taxes previously served as the primary source of funding for the HTF, comprising over 80 percent of its funding between 1995 and 2007, they have proven to be an unsustainable revenue source in recent years. Between 2008 and 2014, the HTF received $65 billion from the U.S. Treasury’s general fund to meet the fund’s obligations, since annual spending for highways and transit began to exceed the revenues generated. Continue reading “Gas Taxes are Unsustainable for Transportation Infrastructure Needs”