Task Force Told Motor Fuels Taxes Provide ‘Inadequate’ Funding

Task Force Told Motor Fuels Taxes Provide ‘Inadequate’ Funding

Long-term dependency on motor fuels taxes is a “looming crisis of inadequacy.” That prediction came Monday afternoon as a representative of the Pennsylvania Department of Transportation testified to the Mileage Based Transportation Funding Task Force. Pennsylvania is part of a multistate research project that is reviewing how a mileage-based user fee system might replace the gas tax. Kentucky’s task force is investigating if such a program could be implemented here to fund growing transportation needs.

Roger Cohen is a senior policy analyst for Pennsylvania’s Transportation Secretary. He spoke Monday on the project that began this year in the I-95 area. It involves 880 people in 15 states who have installed tracking devices to log how much and where they drive. Cohen said most participants are in cities — about 20% are rural.

He outlined several of the project’s goals including determining how feasible it is to use current technology to collect driver information, how to manage drivers who travel through multiple states, how to raise public awareness on the need to adopt a new method of road funding and tracking how a user-based system impacts freight companies. Representatives of Oregon and Utah detailed programs underway in those states at a task force meeting held earlier this month. You can read more on that here.

Road funds nationwide have been tied to the gas tax since 1919. While it has worked for decades, Cohen pointed out, “It has increasingly shown itself to be an inadequate form of funding for infrastructure.” Increased fuel efficiency and a predicted increase in the number of electric vehicles on the road make the gas tax a dwindling source of income. That comes as the population and economy puts more demands on transportation.

The Task Force is expected to draft a report for legislators before the 2020 session. On Monday, cochairman Representative Ken Upchurch (R-Monticello) directed Legislative Research Commission staff to being drafting a letter detailing its findings before the group’s final meeting in November.

While legislators review other methods of funding, Governor Bevin informed city leaders that he believes it is time to increase the state’s gas tax. The governor appeared at a gubernatorial forum held Thursday during the 2019 KLC Conference & Expo.

The Kentucky League of Cities supports increasing motor fuels taxes as long as the proposal also modernizes the state’s road funding formulas, the largest of which has not changed since 1948. A large portion of the motor fuels tax is divided among counties by a formula known as the “formula of fifths,” while cities receive a much smaller amount based on population. The modernization proposal maintains the distribution formulas for the county and municipal road aid programs up to $825 million and then evenly splits amounts above that between the two local aid programs.

Cities have seen populations boom and traffic needs increase since the road aid distribution formulas were put in place, but funds designated for city roads and bridges have not changed. Governor Bevin told city leaders, “It’s hard for me to believe that something we designed in 1948 is still the best.”