Transportation Funding

Transportation Funding

TRANSPORTATION FUNDING 4

TransportationFunding

Theeditor supports the government’s fuel tax increases. The benefitsinclude repair of roads, bridges and transit systems. Higher fuelcosts enhance fuel efficiency that reduces climate pollution (JosephHenchman, 2013).

Since1993, excise tax on fuel was 18.24 and 24.4 cents for gas and diesel.Gasoline would cost 30 cents with the current taxes. Constant pricescontribute to the Highway trust fund to run out of money by May lessit receives money from the congress through tax (Joseph Henchman,2013).

In2013, the American Society of Civil Engineers rated the transitsystems and the state of bridges with failing grades. They createdpoor road and transit systems costing the country billions viaincreased delays, extra fuel costs, and auto repair bills. One thirdof 10,000 annual deaths are by roads (Joseph Henchman, 2013).

RepublicanBob Crocker and James Inhofe of Tennessee and Oklahoma preferincreasing taxes. Iowa and Michigan leaders consider increasing theirpersonal fuel tax. Obama’s administration delays to supportemanates from potential blow back as alleged by a white housespokesman. It prefers blocking corporate loopholes that providesinsufficient funds to the transportation system needs (JosephHenchman, 2013).

Anincrease in tax for a month or a year is unnoticeable by mostAmericans but requires sheltering the poor. The price of gasolinefell from 3.778 in June 2014 to 2.308 in Jan 2015 making the averageAmerican house hold spend $550 per gallon (Joseph Henchman, 2013).

TheCongressional Budget office estimates that a price rise of 10 to 15cents, meets all highway trust fund obligations. A n increase of $ 15adds $3 to the price of a 20 gallon and saves an average $30- asmall price to pay for better infrastructure (Joseph, 2013) .

Gasolinetaxes and user fees pay for half of state and local road spending

JosephHenchman notes transportation funding as a major problem forgovernors and legislators. In 2013, Virginia and Massachusetts raisedtaxes to fund transportation costs, Oregon planned to implement apricing system to tax the vehicle mileage while others installed newor expanded toll roads (Joseph Henchman, 2013).

Thebiggest share of transportation costs should be borne by users. Tollsare appropriate since the user pays for services they directly obtainfrom usage. Taxes through fuel taxes and motor vehicle license taxare appropriate since they are costs incurred during transportation.Transportation spending programs aim at solving transportationfunding. General revenues Approach makes the roads ‘free’. Roadsare over used and congested. Over usage and congestion are theproblems that transportation programs should solve (Joseph Henchman,2013).

In2011, user fees were 50.4% of the states cost of roads, the deficitof 49.65 was funded through general revenues (Joseph, 2013). Nationaland local governments raised 77.1 billion from user fees and taxescompared an expenditure of 153 billion. 12.7, 41.2 and 23.2 billion were raised form tolls and user fees, fuel taxes and vehiclelicense (Joseph Henchman, 2013).

Americanannual driving of 3trillion miles to the annual expenditure is 5.1cents per mile. Tolls, user fees and vehicle tax licenses account for0.4, 1.4 and 0.8 cents. The remainder 2.5 was from state and localrevenues (Joseph Henchman, 2013).

Theexpansion of tolls remains politically unpopular with wanting statusof roads. Transportation costs cannot be ignored and should be fundedfrom user fees and taxes. Subsidies on road spending generatepressure through income tax that is unfair to non users andundermines national growth (Joseph Henchman, 2013).

References

JosephHenchman, Virginialegislators approve increases in sales tax, car tax, regional taxes,Tax Foundation Tax Policy Blog, Feb. 25, 2013,http://taxfoundation.org/blog/virginia-legislators-approve-increases-sales-tax-car-tax-regional-taxes