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The Wall Street Journal

Gas Taxes Are High Enough
January 18, 2008, Page A13

By U.S. Secretary of Transportation Mary E. Peters

Anyone who drives on the highways knows we have a serious and growing traffic problem. This problem has grown from a nuisance to a major economic, environmental and energy threat that costs the country over $78 billion each year in lost time and wasted fuel.

Traffic is just as bad in areas that have low gas taxes as it is in areas that have high gas taxes. And roads are just as jammed in areas that spend a lot on transportation as they are in areas that spend a little. It's clear that our national approach to transportation isn't working. This failure is bad for families, business productivity and the environment. It also distorts real estate markets.

Three years ago Congress created two commissions to examine surface transportation policies and financing. Yesterday, one of those commissions, the National Surface Transportation Policy and Revenue Commission, gave its recommendations to Congress.

Unfortunately, its report maintains a strong emphasis on status quo solutions at a time when the country needs an entirely new transportation policy. As a result, I and two other commissioners have declined to endorse the report's central recommendations. Instead, we issued a chairman's statement that's available at www.dot.gov.

Among the most troubling proposals, the report recommends an up-to 40-cent-per-gallon federal gasoline tax increase over the next five years, with automatic increases every year thereafter tied to inflation. This would more than triple federal fuel taxes from current levels by 2018.

The report also calls for even larger increases to state gas taxes, and the creation of a new federal bureaucracy to centralize transportation spending decisions. It recommends new limitations on states' ability to attract billions in private sector capital available to invest in transportation infrastructure. And it supports federal taxes on all public transportation and intercity passenger rail trips, which, if enacted, would be the first time ever a federal tax was added to the cost of a public transportation ride.

Contrary to the views of the majority of the commission, we do not believe Washington is capable of spending billions more of Americans' money wisely when it comes to transportation investments. Anyone who doubts that should review the more than 6,000 earmarks in the last transportation bill or visit the new Woodstock Museum in upstate New York.

Even if Congress loses its taste for pork, raising gas taxes and spending more on highways still won't improve the quality of Americans' commutes, though it would likely make them more expensive. We tried this already and it simply doesn't work.


Over the past 25 years, the federal government has increased transportation spending by 100%, yet traffic has grown by over 300%. Not surprisingly, recent studies, including one last summer by the Government Accountability Office, have found that higher gas taxes do nothing to improve traffic congestion.

We believe that this country can do much better than simply charging drivers more to sit in never-ending traffic jams. Thanks to technology, an innovative private sector, pioneering state and local officials, and a sustained effort by our administration to encourage reform, a clear alternative has emerged.

This past year, over 20 major cities in the U.S. have submitted proposals to the Department of Transportation to implement some form of electronic tolling that will both reduce congestion and generate needed revenue for transportation projects. Thanks to new open-road technology, these pricing programs can be put in place without forcing a single driver to slow down to pay a toll or have their transponder "read."

Unlike much of the rest of the world -- including China, India and Europe -- as a nation we've barely taken advantage of the billions of private-sector dollars currently available for investment in new road, bridge and other transportation projects. With the kind of encouragement we're recommending, many more states could soon be able to pay for new transportation projects without having to increase taxes, sell new bonds or go further into debt.

California, Florida, Indiana, Texas and the city of Chicago have already raised significant new revenue and improved highways with the support of the private sector. Just last month, Virginia announced that it had reached agreement with private investors to construct some of the most sophisticated, variably priced lanes in the world on the Capital Beltway. The symbolism of that project's location should be lost on no one.

We are at a point where change is no longer theoretical, it is actually happening across the country. We need to encourage, not constrain, state and local leaders willing to pursue fundamentally different strategies to finance and manage transportation systems. And we need to recognize that the needs of commuters and shippers, not the desires of central planners, should drive investment decisions.

The choice is clear. Americans can have higher taxes, more wasteful spending, more congestion and greater pollution. Or they can let the market and state and local governments bring the benefits of a technologically advanced, reliable and high-speed surface transportation system.

Ms. Peters is the secretary of transportation.