Slumping Gasoline Use Cuts Into Highway Funds Americans are not driving as much because of higher gas prices. A drop in gas consumption is hurting gas tax revenues, which pay for roads, bridges and mass transit projects. Transportation officials say they need to rethink the way they collect and dispense money for transportation.
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Slumping Gasoline Use Cuts Into Highway Funds

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Slumping Gasoline Use Cuts Into Highway Funds

Slumping Gasoline Use Cuts Into Highway Funds

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High gas prices are straining everyone's finances, including the government's. That's because when Americans skimp on gas, they pay less gas taxes - the taxes that finance transportation projects across the country.

The Bush administration says the best solution isn't to raise the gas tax, but to get rid of it. NPR's Kathleen Schalch reports.

KATHLEEN SCHALCH: Americans have responded to record gas prices by driving less, a lot less, for seven months in a row. The latest figures for May show a 3.7 percent drop in total miles driven from a year ago. That's the third-largest monthly decline ever recorded.

At the same time, Americans are switching to more fuel-efficient vehicles. Transportation Secretary Mary Peters says burning less fuel is a good thing.

Secretary MARY PETERS (U.S. Department of Transportation): Fuel has environmental effects that we're not necessarily crazy about, and fuel also impacts our energy security in that we continue dependence and are paying money, if you will, to countries that don't necessarily have our best interest in mind.

SCHALCH: But the question is how to keep funding transportation. Slumping gas consumption means less revenue for the Federal Highway Trust Fund. Next year, it's expected to face a $3.1-billion shortfall. The federal government may need to slash transportation spending by a third, delaying some projects, even canceling them.

Politicians aren't going to close the gap by raising gas taxes. They didn't want to do that even when gas was cheap. The Bush administration argues that this isn't the right long-term solution, anyway. Again, Transportation Secretary Peters.

Sec. PETERS: I think that it's time to say what we're doing today is not working, will not work into the future. And so then, what will?

SCHALCH: Today, the Bush administration will reveal its own proposal. It would tap new technology to charge Americans fees based on where, when and how they travel.

Sec. PETERS: I could just have a device on my car that would record what time of day I was traveling, whether I was traveling by myself, the weight of my vehicle, and I would get a billing every month for the amount of transportation services that I used.

SCHALCH: People who use public transit would pay into the system, as well. And Peters says the money should also be spent differently.

Sec. PETERS: The way that we allocate today's gas-tax dollars is 20 percent of those dollars go into transit, and 80 percent of them go into highway use.

SCHALCH: And while road projects are approved automatically, it's much harder to get federal funds for mass transit. Peters thinks that should change. Many outside analysts agree. Rob Fuentes is a fellow at the Brookings Institution's Metropolitan Policy Program. He says the system was set up decades ago, when the whole focus was highways.

Mr. ROB FUENTES (Fellow, Metropolitan Policy Program, Brookings Institution): The money is given down to the states based on how far people drive, how much people drive, how many roads you have. These are the bases for the funding formulas. So it's an old formula that has no business here with the dawn of the 21st century.

SCHALCH: Fuentes says the existing system is counter-productive when it comes to curbing congestion, gasoline consumption and global warming. Congress could decide to revamp the program, but not until late next year, when it takes up the next massive, multi-year transportation bill. For now, the government has to figure out how to keep the promises it's already made.

President Bush has proposed shifting cash from mass transit to highways. Lawmakers balked, pointing out that record numbers of commuters are now abandoning their cars and crowding onto buses and trains.

The House of Representatives voted to siphon $8 billion from the general fund into the highway trust fund, but the Bush administration opposes this, saying it would just add to the federal deficit. Kathleen Schalch, NPR News, Washington.

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