Paying for Good Roads and Bridges 
By John McClaughry

How is Vermont going to maintain, let alone improve, its highway system over the next ten or twenty years? That question has been brought to center stage by the collapse of the interstate bridge in Minnesota a month ago. 

The Federal Highway Administration objectively rates each state on the condition of its bridges. By its standards, one out of six Vermont bridges is rated "structurally deficient". 

The Reason Foundation’s 2007 Report on the Performance of State Highway Systems, using a broader definition of "deficient", rates the condition of Vermont bridges 44th among the states. The same report finds that Vermont ranks 46^th in the condition of its rural primary road pavement, and 37^th in the overall "cost effectiveness" of its highway program. This latter ranking reflects a drop of 13 places since 1998, the largest drop of any state. 

This fiscal year Vermont plans to spend $400 million on transportation. The state share ($196 million) of this spending comes from three main sources: motor fuel taxes, license fees, and two thirds of the purchase and use tax. (The 2003 legislature diverted the remaining one third – 2% of a vehicle’s sale price – to fund education property tax rebates under Act 68.) 

The Agency of Transportation projects on the order of a $150 million annual shortfall, between its expected revenues and what it would cost to maintain and repair Vermont’s existing highways, plus repair our structurally deficient bridges over the next decade. Every year that that shortfall is not addressed, it will grow.

Uncle Sam is not the solution. Unless Congress comes up with new money, the Federal Highway Trust Fund will run dry in 2009. The federal gas tax (now 18.3 cents per gallon) has remained unchanged since 1993, but Congress is loath to raise gas taxes when voters are screaming about $3.00 a gallon gas. 

Vermont’s last gas tax increase came with the infamous Act 60 of 1997, which raised the tax from 16 to 20 cents a gallon. In 2006 the House narrowly approved a four cents per gallon increase, but the Senate scrapped the tax in favor of increased registration and license fees. (A legislator can vote to increase fees without being found guilty of raising taxes.) 

Speaker Gaye Symington supports a gas tax increase, but Gov. Douglas strongly opposes it, as does Senate Transportation chair Dick Mazza. Sen. President Peter Shumlin, who spent the 2007 session desperately looking for taxes to raise to fund a program to explain to Vermonters that they can save money by using less heating fuel, has not yet taken a position.

The enviros in the legislature want to impose a "gas guzzler" tax on low mileage vehicles (notably vans and SUVs) and use the proceeds to give incentives for high mileage vehicles (hybrids and mini-cars). In Congress, Sen. Bernie Sanders is demanding higher Corporate Average Fuel Economy Standards. Both of these ideas will reduce motor fuel tax revenues – to zero, in the case of electric, natural gas, and hydrogen powered vehicles.

One step toward resolving this emerging problem is to reverse the diversion of $27 million a year in vehicle purchase and use tax revenues into the Education Fund. Many of the legislators who shouted down Gov. Douglas’s proposal to do this in 2006 then cheerfully voted to authorize public schools to dip into the Education Fund for more than twice as much money, to finance two grades of universal preschool.

Another useful step would be to relax foolish environmental rules that drive up the costs of reconstructing existing bridges. Another would be to abandon the dream of subsidized passenger rail service - remember Gov. Dean’s $28 million Champlain Flyer?

But in the end legislators will have to find a new way to bring in the serious money needed to keep our highway system safe, smooth and efficient. Indexing the gas tax to inflation, or to some rolling average linked to the price per gallon, is only a stopgap measure.

The leading new revenue technique, recently field tested in Oregon, is charging motorists not by the gallon consumed, but by the miles traveled. This requires expensive GPS tracking, sophisticated computer processing, and varying charges based on vehicle weight and time of day usage. It also raises the concern that Big Brother’s transportation agency will know where your car has been. And the enviros will say: if you’re paying by miles traveled, why wouldn’t more people drive big gas guzzlers?

The condition of Vermont’s roads and bridges is likely to worsen for another decade. Getting a grip on this problem is very much worth doing now. A lot of people’s jobs may depend on it.
 

John McClaughry is President of the Ethan Allen Institute (www.ethanallen.org).