States Consider Sales & Wholesale Fuel Taxes, Tolls and Mileage-Based Fees to Fund Transportation

Sales taxes, wholesale fuel taxes, tolls and mileage-based fees all factored into news items about transportation funding this week. I also have a few updates on topics addressed during the CSG Transportation Policy Academy last month in Portland, Oregon.

State Transportation Funding Updates

  • Illinois: A coalition of business leaders is proposing replacing the state gas tax with a percentage tax based on the wholesale price of fuel, The Belleville News Democrat reported. Illinois Chamber of Commerce President Doug Whitley, who co-chairs the coalition, said this week that the current 19-cent flat gas tax no longer generates enough revenue to maintain the state’s highways and bridges due to increased fuel efficiency.
  • Michigan: A sales tax increase to fix roads and increase education spending is still on the table but lawmakers think it’s a longshot they could reach a deal in time to put a proposed constitutional amendment on the ballot this November to install the increase, the Associated Press reported. September 6 is the deadline to place a measure on the ballot.
  • Massachusetts: Toll collection is expected to be restored on the western end of the Massachusetts Turnpike by October 15, The Berkshire Eagle reported. Toll rates will be the same as they were in 1996 when they were discontinued by then-Gov. William Weld. As part of a transportation financing package passed despite Gov. Deval Patrick’s veto last month, state legislators ordered the restoration of the tolls, which are expected to yield about $12 million a year to help fund transportation projects statewide. Meanwhile, The (Western Massachusetts) Republican reported that Patrick’s administration is moving forward with a $250 million plan to demolish toll plazas, eliminate toll collectors and install all-electronic tolling on the Turnpike.
  • Mississippi: State Sen. Willie Simmons, who is heading up a Senate transportation study committee, said this month the state should levy $700 million in new taxes to support road maintenance, the Associated Press reported. The plan calls for $358 million a year in higher gas taxes, more than $160 million in higher diesel taxes and for reducing sales tax exemptions by $76 million.
  • Nevada: State department of transportation officials briefed members of the Nevada Board of Transportation this week about the agency’s partnership with state universities UNLV and UNR and the states of Oregon and Washington to study the feasibility of collecting mileage-based user fees to fund transportation. The concept was met with some skepticism, the Las Vegas Sun and Las Vegas Review-Journal both reported.

Follow-Up: CSG Transportation Policy Academy 2013

Oregon’s approach to the mileage-based user fee concept was a key focus at our recent Transportation Policy Academy in Portland, Oregon, which you can read about here. For those interested in continuing to track the issues we discussed in Portland, here are a few more updates and additional resources to peruse:

  • Our friends at the National Conference of State Legislatures passed a resolution this week calling on Congress to support the creation of a $20 million program to support state-level pilot programs to explore alternatives to the gas tax to fund transportation. The resolution was sponsored by Oregon state Sen. Bruce Starr, who was also one of the sponsors of Senate Bill 810, which authorized Oregon’s new mileage-based road usage charge program.
  • Former Pennsylvania Gov. Ed Rendell, who now co-chairs the Building America’s Future Educational Fund, praised Oregon officials for the innovative measure. “Governor (John) Kitzhaber and the Oregon legislature have demonstrated real leadership in identifying a fresh way to address the state’s shortfall in transportation funding,” he said. “Like many other states, Oregon has grown weary waiting for Congress to pass a robust and long-term transportation bill and instead is blazing its own trail. I am hopeful that Congress is paying close attention to what is happening in the states and will embrace some of these innovative solutions at the federal level.”
  • The potential benefits of a mileage-based fee are touted in a Streetsblog Capitol Hill piece this week by Noel Popwell, a freelance writer and revenue analyst with New Jersey state government. Popwell writes that per-mile charging could ease traffic congestion, be a game-changer for the environment, and could even be good for the economy.
  • Wayne Senville of Planners Web recently profiled First Stop: Portland, the non-profit group that organized our tour of the South Waterfront and Pearl Districts during the policy academy. In a separate post, he wrote about the Portland Aerial Tram, which policy academy attendees had the opportunity to ride.
  • Washington state House Transportation Committee Chair (and CSG Transportation Public Policy Committee Co-Chair) Judy Clibborn was also among our speakers in Portland, providing a post-mortem on the failure of a transportation funding package in her state legislature this year, which may have also doomed a long-planned new bridge crossing over the Columbia River. There was news on both fronts this week and from both Washington and Oregon. The Spokesman-Review reported that Washington Senate Transportation Committee Co-Chair Curtis King, a Republican, released a package of transportation reforms he says are needed before conservative lawmakers will support a tax increase (the measure rejected in June included a 10.5 cent gas tax increase that would have raised $10 billion through 2025).  Joel Connelly of the Seattle Post Intelligencer also wrote this week about how Washington state might move forward after the failure of the transportation package. Meanwhile, The Oregonian and The Portland Tribune both reported this week on an effort by Oregon supporters of the Columbia River Crossing to try to revive the project without the funding Washington state was expected to contribute.