Federal fuel tax increase the only way to fund infrastructure upgrade, according to study

A federal fuel tax increase is the only way to fund the Trump Administration’s infrastructure goals, an American Transportation Research Institute (ATRI) report found.

© Shutterstock

The report, A Framework for Infrastructure Funding, said other means of raising funds, such as tolls, are ineffective and place a hardship on drivers. A tax increase, on the other hand, would motivate states to generate funds matching federal ones.

It has been more than 20 years since the federal fuel tax was last raised, and polling indicates Americans prefer a fuel tax to other means of generating transportation revenue. The ATRI recommends an increase of 10 to 20 cents.

The trucking industry loses more than $63 billion annually because of freight bottlenecks while contributing $18 billion in federal user fees.

“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,” Dennis Dellinger, president of Cargo Transporters, said. “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.”

ATRI also recommends a federal vehicle registration fee and a vehicle-miles-traveled tax.