The Wisconsin State Journal in a news article this week states that the state will be short $15.3 billion over the next decade” largely because more fuel-efficient vehicles, including hybrids and electric cars, are eroding state revenues from the gas tax, the largest source of state transportation funding.” These statements have been repeated by DOT officials, media publications and transportation professionals – blaming more efficient cars and electric vehicles for the precipitous fall in state transportation revenues.
While this is no-doubt true, this is definitely not the main reason why fuel tax revenues are dropping. The single most significant factor is that we are simply driving less. Less driving means less fuel sold at the pump, leading to lower gas-tax revenues. The graph below shows how closely state transportation revenues from the motor fuel tax track vehicle miles driven.
Some other reasons include inflation – leaving each dollar in the transportation fund worth less than it was a year ago, and an increase in the use of other modes of transportation like public transit, biking and walking.
We must be careful not to paint those who are taking steps to be more environmentally conscious by driving more fuel-efficient vehicles as the cause of the deterioration in the state’s transportation system. We must instead re-evaluate the transportation funding mechanisms which allocate nearly a third of the total transportation budget to new highway construction, while driving has decreased or remained flat for over a decade.
-Ash Anandanarayanan, Transportation Policy Analyst