As fuel efficiency rises, money in road maintenance fund drops

? A cash crunch is fast approaching for the government trust fund that pays to build and repair highways and bridges.

The federal tax on a gallon of gas has not risen in 14 years and Congress is reluctant to increase it. People are demanding more fuel-efficient vehicles – less gasoline used, fewer dollars for the fund.

States already are looking for other places for road-building money – toll road and consumption-based sales taxes, for example. They worry that the fund’s looming shortage could hurt their efforts to address traffic congestion as well as environmental and safety problems caused by inadequate roads.

The situation can only get worse in 2009, when revenues for the Federal Highway Trust Fund begin falling short of planned federal spending.

The fund provides the overwhelming bulk of federal dollars spent on highways. It gets its money mainly from the 18.4 cents-a-gallon excise tax that drivers pay at the pump.

Self-service regular now tops $3 a gallon. There is concern the price will reach a price at which people will get serious about cutting back on driving – sending less money into the fund. Fuel tax receipts did dip last summer when there was a spike in pump prices.

About 45 percent of all highway spending comes from the trust fund. With less money available from the fund, states must turn elsewhere for money to expand their highways and fill their potholes. That prospect is making lots of people unhappy.

¢ Indiana, facing a $1.8 billion gap in money needed for road improvements, negotiated a $3.85 billion deal with an Australian-Spanish consortium to lease and operate the Indiana Turnpike for 75 years. Voters expressed their displeasure, electing Democrats to replace a Republican-run House that signed off on the deal.

¢ In Florida, with federal aid declining, more than 90 percent of new roads since the early 1990s have been toll roads, state Transportation Department spokesman Dick Kane said.

¢ Voters in Washington state approved a 14.5-cent increase in state gasoline taxes over a five-year period.

¢ In California, voters decided to borrow the money, approving bond issues totaling $19.9 billion to be used for highway and transit projects over the next 10 years.

¢ Georgia increased its construction program from

$911 million to $2 billion, largely through a sales tax on gasoline that rises with fuel prices, unlike the frozen federal levy.

The American Association of State Highway and Transportation Officials says at least six states have adopted variable fuel taxes that are pegged to inflation.

¢ Oregon is experimenting with a voluntary system where drivers pay a user fee based on miles driven rather than gas consumed. Some environmentalists say this approach negates the benefits of buying fuel-efficient cars.

¢ Texas, Virginia and Minnesota are among states that have built or are building high-occupancy toll lanes where drivers can pay to have a congestion-free path before them.

Gasoline was only 30 cents a gallon and the excise tax on it was just 3 cents in 1956 when Congress created the highway trust fund. As gasoline prices rose, so did the tax. But a tax-adverse Congress has kept it at 18.4 cents a gallon since 1993, when gasoline prices were about $1.10 a gallon.