Today’s Pickup: To fix roads, federal fuel tax increase is only option, ATRI says

An ATRI report says that a fuel tax increase is the only way to properly fund road improvements. (Photo: Shutterstock)

An ATRI report says that a fuel tax increase is the only way to properly fund road improvements. (Photo: Shutterstock)

Good day,

If the Trump administration wants to push through a massive infrastructure bill, the only viable way to do that is to raise the federal fuel tax. That is the conclusion of an American Transportation Research Institute (ATRI) report entitled "A Framework for Infrastructure Funding."

The inefficiency of other mechanisms, including mileage-based user fees and increased tolling, will fall far short of the needed revenue stream without placing undue hardship on system users, ATRI concluded.

The organization also noted that a federal fuel tax increase would incentivize states to generate matching funds.

“Maybe the most important and unexpected benefit of a federal fuel tax increase is the hundreds of thousands of new, high-paying construction jobs that will be produced,” said Dennis Dellinger, President of Cargo Transporters. “We often assume that the only reason to raise the fuel tax is to lay more asphalt and concrete. Forgotten in the mix is that tax revenues can simultaneously produce good roads and good jobs.”

The ATRI report also noted that the growth of e-commerce will likely slow if nothing is done to improve infrastructure as deliveries are increasingly caught up in congestion and other infrastructure-related delays.

Other recommendations include a federal vehicle registration fee to fill funding gaps associated with electric vehicles and the avoidance of a national vehicle miles traveled tax that would have to be collected by a large bureaucracy and would be fraught for tax evaders.

ATRI concluded that a 20-cent increase in the federal fuel tax would result in 500,000 jobs created nationally. In total, states would receive between $15 billion and $30 billion or more annually through a federal fuel tax increase of between 10 cents and 20 cents.

Did you know?

According to ATRI, the trucking industry pays more than $18 billion in federal user fees each year, but traffic congestion and freight bottlenecks cost it more than $63 billion annually.

Quotable:

“There are going to be multiple different hats to wear and that’s what is going to be exciting in working with the Nikola team and applying 25 years of experience in the commercial transportation market and helping bring what I think is a great product to the industry.”

- Scott Perry, formerly CTO of Ryder Systems, to Trucks.com on his new job as COO of Nikola Motors

In other news:

U.S. seeks to stop Mexican trucks under NAFTA

U.S. negotiators are pushing to ban long-haul Mexican-based trucks under NAFTA, according to reports of the latest round of negotiations. (Bloomberg)

Infrastructure funding mechanism cut out of tax bill

A tax provision that allows public-private partnerships to keep the deduction on tax-exempt private activity bonds has been removed from the GOP tax bill. (The Hill)

Oil demand to keep growing

A new report from OPEC says that oil demand will continue to grow before peaking around 2040, suggesting the rise of the electric car may not be as quick as many believe. (Wall Street Journal)

FMCSA administration choice clears first hurdle

The nomination of Ray Martinez, Trump’s pick for FMCSA Administrator, has been voted out of committee and will now head to the full Senate for confirmation. (CCJ)

RI truck tolls postponed

Plans to add truck-only tolls on some Rhode Island roads have been delayed to February or March, officials said. (Transport Topics)

Final Thoughts

Rhode Island may be a small state, but its plans to add truck-only tolls to its highways has been hotly fought by industry. A delay will now push those tolls off until early next year as the state continues to work on back-end collection systems and the DOT works to address privacy concerns raised by the ACLU over the collection of data.

Hammer down everyone!

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