The Future of Funding
What does the future of transportation funding look like? The answer is, it’s too soon to tell.
What does the future of transportation funding look like?
The Commission meets regularly with elected officials, staff, and business and community leaders in meetings throughout the state. The single message heard most often—in communities large and small, rural and urban —is that more revenue is needed to take care of basic transportation system needs.
Not just more revenue, but more predictable, stable revenue that keeps pace with inflation and allows communities to better manage their transportation assets. For decades, fuel taxes have been the primary source of roadway funds for local and state agencies. This made sense in many regards since fuel taxes related to highway and roadway use. Historically, the more people traveled, the more they paid and the more revenues were generated to support ongoing transportation needs.
Planning for Declining Fuel Tax Revenues
For decades, fuel tax revenues were fairly stable, predictable, and inexpensive to administer. That model has eroded. Increasing fuel efficiency and adoption of electric vehicle technology—both of which are good things—reduce gas tax revenues. In addition, the federal government’s share of funding for transportation has declined sharply over the last 25 years, in part because the federal gas tax of 14.4 cents per gallon is the same today as it was 25 years ago. Congress last increased the gas tax in 1993. Responsibility for funding the nation’s infrastructure is increasingly devolving to states and local government.
At the state level, the vast majority of new state gas tax revenues generated over the last 15 years are earmarked for big projects, debt financing, and competitive programs; little of the 26.4 cents added to the state gas tax since 2003 goes back to counties and cities directly in the form of discretionary revenues. Instead, nearly 100 cities and counties have enacted local option taxes to augment state funds available for local projects and programs. What we know is that it won’t rely on gas tax revenues as it has in the past. It’s likely to rely more on direct user fees, like tolls or mileage-based fees.
Road Usage Charge Pilot Project
The Road Usage Charge (RUC) pilot project underway in 2018 will provide useful insights into the practicality and fairness of a mileage-based fee replacement for the state gas tax. The pilot project will help us understand how a mileage-based road usage charge would work for different drivers in different parts of the state, and whether a charge such as this is a good way to pay for our transportation system needs in the future.
Feedback from two thousand participants will help the Legislature determine if this is an equitable and sustainable way to fund transportation. We expect there will be more opportunities for funding collaboration with the private sector, though we don’t know yet all the forms that may take. We do know that new models of cooperation will accompany the new models of mobility that are emerging early in this century. There are likely to be increased opportunities for regional coordination, too.
RTPOs and MPOs are uniquely positioned to help Washington make the kind of adaptive, nimble investment decisions we’ll have to make in the coming years. They already have in place the mechanisms for regional coordination and collaboration among relevant constituencies, and they maintain the strategic long-range plans for their regions and facilitate regionally coordinated project reviews and prioritization informed by adopted land use plans. RTPOs and MPOs ensure consistency between local and regional objectives, as well as between regional and statewide objectives. Involving them more in state-level funding decisions will result in better state and local decisions. With these uncertainties in mind, 2040 and Beyond includes an array of practical recommendations to support our transportation funding needs.
