Sunday, January 29, 2023
Hawai'i Free Press

Current Articles | Archives

Wednesday, April 21, 2021
How Are Your State’s Roads Funded?
By Tax Foundation @ 8:07 PM :: 1748 Views :: Hawaii Statistics

How Are Your State’s Roads Funded?

by Ulrik Boesen, Tax Foundation, April 21, 2021

Both the federal government and the states raise revenue for infrastructure spending through taxes on motor fuel and vehicles. The states also collect fees from toll roads and other road charges. This system constitutes a well-designed user fee system, as taxes paid by users of infrastructure are dedicated to building and maintaining infrastructure. However, neither the federal government nor the vast majority of states collect enough taxes through these levies to cover infrastructure-related spending.

Per tradition in Washington, D.C., every week is infrastructure week, but currently, this joking description holds especially true. Since President Biden unveiled his administration’s proposal for increased infrastructure spending in the American Jobs Plan, debate over how to fund investments in infrastructure has taken center stage. A similar discussion is happening in many states, where lawmakers are grappling with questions over the future of infrastructure revenue and spending.

Traditionally, revenue dedicated to infrastructure spending has been raised through taxes on motor fuel, license fees, and tolls, but revenue from motor fuel has proven less effective over the last few decades. Between developments in vehicles’ fuel economy, increased sales of electric vehicles, and inflation, taxes on motor fuel generally raise less revenue per vehicle miles traveled (VMT) than they did in the past. As a result, most states contribute revenue from other sources to make up differences between infrastructure revenue and expenditures.

The amount of revenue states raise through taxes on infrastructure and transportation vary to a significant degree—as do the sources. Four states (California, Indiana, Montana, and Tennessee) raise enough revenue to cover their highway spending, but 46 states and the District of Columbia must cover the difference with tax revenue from other levies. Alaska (17 percent) and North Dakota (29 percent), which both rely heavily on revenue from severance taxes, raise the lowest proportion of highway funds from transportation taxes and fees.

State infrastructure revenue and state infrastructure spending, How are roads funded in your state? Road funding by state, infrastructure spending by state, infrastructure revenue by state, gas taxes and tolls 2021

States that cannot rely on the oil and gas industries for funding have tried a variety of funding sources to come up with the money necessary for infrastructure upkeep. Though politically unpopular, motor fuel taxes, license fees, and tolls are all relatively good applications of the benefit principle—the idea that the people paying the taxes and fees should be the ones to benefit from them. States should seek to fund infrastructure through user taxes and fees as much as possible, internalizing the costs associated with using the state’s transportation systems.

However, with the sustainability of established motor fuel taxes increasingly threatened, it may be time for lawmakers at both the state and federal levels to consider other options for transportation revenue. One such option is a vehicle miles traveled (VMT) tax. Instead of using fuel as a proxy for road usage, taxing actual road usage would better respect the benefit principle and guarantee that the tax acts as a user fee.

A few states have already begun pilot programs to study the feasibility of VMT taxes, and Pennsylvania Gov. Tom Wolf (D) recently announced a commission to study phasing out motor fuel taxes. On both a federal and a state level, imposing a VMT tax does require lawmakers to make some hard decisions on trade-offs. Significant concerns regarding privacy must be addressed and balanced against a desire for a targeted, equitable, and efficient tax.

For a more detailed breakdown of where states’ user-based road funding comes from, check out the following table.

How Much of Road Spending is Funded with User Taxes in Your State?

Share of State & Local Road Spending Covered by State & Local Tolls, User Fees, & User Taxes (FY 2018)

State Hawaii
State Infrastructure Revenue  $588,588,000
Motor Fuel Tax Revenue as % of Infrastructure Revenue 30%
License Revenue as % of Infrastructure Revenue 69%
Tolls and Charges as % of Infrastructure Revenue 1%
State Share of Highway Spending  $700,173,043
% of Highway Spending Funded with Transportation Taxes, Licenses, and Fees 84%

 

 

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT