Highway funding ideas include taxes on hybrids

WASHINGTON -- Taxing hybrids and other fuel-efficient cars and billing drivers for miles driven are among the approaches being suggested to avert a shortfall in money to maintain the nation's highways.

Less than four months after President Bush signed a six-year, $286.4 billion highway and public transit act, a report commissioned by the U.S. Chamber of Commerce says the federal Highway Trust Fund is running out of money.

"Decisions are going to have to be made in the very near future," said Ed Mortimer, the business lobby's director of transportation infrastructure, acknowledging it could be a tall order. The next highway bill is years away and lawmakers may be loath to return to a measure that was widely criticized for being padded with thousands of special-interest projects.

The recently issued study, commissioned but not endorsed by the chamber, estimated that the trust fund, financed by the federal tax on gasoline, will take in only $231 billion over the six-year course of the act, and that the highway portion of the fund would hit a zero cash balance in 2008, a year before the act expires.

The report also concluded that revenues from all levels of government will fall $500 billion short of what is needed just to maintain pavement and bridge conditions and traffic levels through 2015, and $1.1 trillion short of what is needed to improve the nation's infrastructure.

In the short term, the study recommended that the federal gas tax, set at 18.4 cents a gallon since 1993, be indexed for inflation. Of that, 15.44 cents goes to highways, with most of the rest to mass transit accounts.

Last year, the House Transportation Committee backed raising the tax, the only major tax not adjusted for inflation, by 4 or 5 cents to pay for a $375 billion bill. The administration warned that the president would veto any bill that increased taxes.

The study argued that the fuel tax has lost one-third of its purchasing power since 1993 and that of the 60 cents per mile that drivers now pay to operate a car, only 1 cent goes to federal taxes.

Other possible short-term money-raisers include expanded use of tolling and bonds, closing fuel tax exemptions, and dedicating 10 percent of U.S. Customs import revenues to port and freight facilities.

Proposals for the longer term could be more controversial. One is that owners of hybrids and other alternative fuel vehicles pay a vehicle fee, the argument being that drivers should bear their fair share to fill the potholes and fix the bridges, regardless of how much or what kind of fuel they use.

In the same vein, the report said federal and state governments should begin moving from the fuel tax to a mileage-based system.