Peters urges 'demand-based' financing for highways

| 1/20/2004

While speaking to the Transportation Research Board’s annual meeting in Washington, DC, recently, Federal Highway Administrator Mary Peters discussed new demand-management models to generate highway funding beyond revenue available from the current fuel-tax-based system.

Reviewing the current approach is "an issue we need to look at deliberately and comprehensively over the next few years," she told Congressional Quarterly Today. Peters said the erosion of the Highway Trust Fund through tax breaks granted to alternate fuels such as "gasohol" fuel blends and increased fuel-efficiency of U.S. vehicles is pointing the way to the changes.

The long-term cash flow through the Highway Trust Fund, as currently configured, will not cover the U.S. highway system needs identified in FHWA's latest Conditions and Performance Report, she said. That report identified highway and bridge maintenance needs of $79.5 billion, with a price tag of $106.9 billion to achieve improvements, for the period from 2001 to 2020.

Peters suggested that a new system that collects from users based on their amount and time of use needs to be explored, along the lines of  “a public utility model" where time of use and relative demand are factors. 

"We can't depend on fossil fuel taxes into the future," and planning needs to begin to find ways to shift away from the current approach, she said.