Denver Post: CDOT to test taxing drivers by the mile instead of at the pump

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"Carl Davis, research director at the Washington, D.C.-based Institute on Taxation and Economic Policy, said it’s true that state governments will have to find alternate ways of generating revenues for road projects as more cars go hybrid and electric. And he lauds Colorado, Oregon and California for testing the per-mile tax concept for the day when it will be needed.

But he said it may not be the short-term panacea states think it is. He said construction costs since 1990 have risen 62 percent while fuel efficiency has only gone up 17 percent in that period.

'Inflation has been more important than hybrid technology in explaining why tax gas revenues are falling short,' Davis said.

The real solution, at least in the short term, is to index the gas tax to inflation, as has been done in six states. Georgia last year did something even better, he said. Lawmakers there passed legislation that links the gas tax rate to inflation in highway construction costs and to shifting fuel efficiency standards.

'I think there’s value in charging drivers for their use of the road,' Davis said. 'But it’s important not to get ahead of ourselves. I think the gasoline tax has a lot of promise — it is just badly designed.'"

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Carl Davis, research director at the Washington, D.C.-based Institute on Taxation and Economic Policy, said it’s true that state governments will have to find alternate ways of generating revenues for road projects as more cars go hybrid and electric. And he lauds Colorado, Oregon and California for testing the per-mile tax concept for the day when it will be needed.
But he said it may not be the short-term panacea states think it is. He said construction costs since 1990 have risen 62 percent while fuel efficiency has only gone up 17 percent in that period.
“Inflation has been more important than hybrid technology in explaining why tax gas revenues are falling short,” Davis said.
The real solution, at least in the short term, is to index the gas tax to inflation, as has been done in six states. Georgia last year did something even better, he said. Lawmakers there passed legislation that links the gas tax rate to inflation in highway construction costs and to shifting fuel efficiency standards.
“I think there’s value in charging drivers for their use of the road,” Davis said. “But it’s important not to get ahead of ourselves. I think the gasoline tax has a lot of promise — it is just badly designed.”