A Primer on User Fees and Taxes

Triad Strategies recently posted an item on its blog, The Triadvocate, explaining the difference between general taxes and user fees. The following is a re-post of that blog:

Your teacher told you in grade school that it would be important to know how to use a dictionary. Now, the current Pennsylvania public policy debate on transportation funding has given you the perfect example of why she was right.

Most people say they don’t want new taxes. At the same time, people say they want better, safer roads and functional mass transit systems in urban areas. They are willing to pay a reasonable sum for using these facilities. So it’s important to know how you are paying for what you want and need and what the labels mean. Read more

Survey Finds Support for Gas Tax Increases

Source:  ARTBA (reprinted with permission, Washington Newsline, May 9, 2011)

A Mineta Transportation Institute at San Jose State University study released May 5 found 62 percent of respondents supported a 10- cent per gallon federal gas tax increase specifically dedicated to improving road maintenance.  Backing for a 10-cent increase dropped to below 50 percent when revenues were dedicated to transportation projects to reduce local air pollution and global warming.  The study also evaluated other infrastructure revenue generating alternatives: 45 percent or respondents approved of a 0.5 cent sales tax increase; a mileage tax adjusted by vehicle pollution levels received 36 percent; and a flat mileage tax of 1 cent per mile was supported by 22 percent. Interestingly, a generic gas tax increase of 10 cents per gallon without specific goals received only 24 percent backing. This data suggests that respondents were willing to invest so long as there are clear and identifiable infrastructure benefits.

The Mineta findings contrast with a February 2011 survey from the Rockefeller Foundation where 71 percent of respondents said “it would be unacceptable to increase the federal gas tax.” The disparity amongst these survey results, and others, reinforces the varying degrees of public understanding on transportation finance and the importance of how opinion surveys are crafted.  To view the study, click here.

Fully funding transportation is crucial to reducing national deficit

The Associated Pennsylvania Constructors (APC) released the following statement in reaction to today’s recommendation of the National Commission on Fiscal Reform and Responsibility to fully fund the federal Transportation Trust Fund instead of relying on deficit spending.  The commission also recommended dedicating a 15-cent per gallon increase in the federal gas tax to transportation funding, and limiting spending if necessary to match the revenues the trust fund collects each year.  To view a copy of the full release, click here.

Higher than expected revenues don’t negate the need for additional transportation investment

The Commonwealth of Pennsylvania reported slightly better than expected Motor License Fund (MLF)* collections in September.  While this is a welcome and encouraging sign, the MLF is still yielding far less than needed for an adequate highway program. Read more

Analysis shows gas taxes lowest ever

When inflation and improved gas mileage are factored in, motorists today are paying half the gasoline taxes that they paid in 1975, according to a USA Today analysis.  The story is a must-read for anyone who wonders why our transportation infrastructure is crumbling.   To view the article, click here.