Experts say it’s time to move away from the gas tax

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(Host) High gas prices mean the state and federal governments are collecting less money in transportation taxes.

The shortfall comes just as Vermont struggles to pay for a backlog of needed road and bridge projects.

Some experts say it’s time to look for new revenue sources.

VPR’s John Dillon reports:

(Dillon) The outlook for Vermont’s transportation fund is bleak. The fund is supported by gas taxes, and the sales tax on vehicles.

But people are driving less, and buying smaller, less expensive cars. So both sources of revenue are declining. David Dill is deputy transportation secretary, who takes over the top job next month.

(Dill) "The trend actually started before the $4 a gallon gas, but it’s certainly accelerated since then.”

(Dillon) The state Transportation Fund finished the fiscal year in June about $3 million below projections.

The same factors that have caused Vermont road revenues to decline have also affected the federal Transportation Fund.

The federal fund helps pay for projects all over the country, and it faces a shortfall of about $3 billion.

(Dill) "If we don’t get that fund fixed, we could face a significant decline in what we receive in federal funds as well as state funds.”

(Dillon) The U.S. House has passed legislation to add $8 billion to the fund, but the measure has not passed the Senate. President Bush has also threatened a veto.

The funding crisis has highlighted the country’s reliance on gas and diesel taxes to pay for transportation projects.

Lisa Aultman-Hall directs the Transportation Research Center at the University of Vermont. She says that experts for years have urged policymakers to look for new revenue sources. But this year’s summer’s gas prices have added urgency to the discussion.

(Hall) "Everyone is talking about it, and we’re hoping that that means we’re going to move to some solutions. But unfortunately the solutions and the options are not easy to transition to. They have a very differential impact in urban areas and rural areas.”

(Dillon) Experts have proposed traffic congestion taxes or fees that are levied on vehicle miles traveled.

But Aultman-Hall says these ideas probably won’t work for rural areas. For example, in Vermont, people drive much longer distances than they do in cities, and they often don’t have public transportation alternatives.

(Hall) "We need to talk about how this paradigm shift in how we fund transportation is going to impact rural states. We need to think really carefully about that, because the needs are different.”

(Dillon) The UVM Transportation Center hopes to guide that discussion. The center is holding a summit this winter to focus on the dilemma facing rural states in the post-gas tax era.

For VPR News, I’m John Dillon in Montpelier.

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