New report: Money for nothing? How to make better use of our transportation dollars

Media Contacts
Matt Casale

Former Director, Environment Campaigns, U.S. PIRG Education Fund

Falling gas tax revenues, more spending highlight need for a new plan for transportation financing

U.S. PIRG Education Fund

BOSTON — Gas taxes are supposed to pay for the construction and maintenance of roads, but too often, they don’t, according to a new report from U.S. PIRG Education Fund and Frontier Group. The report, Shifting Gears, suggests that to build a cleaner, safer and more affordable transportation system, it is time to shift gears.  

“One of the most persistent fallacies underpinning U.S. transportation policy is that roads pay for themselves,” said Matt Casale, director of PIRG’s environment and transportation campaigns. “But that hasn’t been true for a long time. This ‘user fee’ system of funding was designed to facilitate the construction of high-quality roads when there were few of them. We need a new system for an era of new technologies and new challenges.”

Gas taxes and other fees on drivers pay have not kept up with inflation or the rising costs of road building and now account for only around half of the total cost of building and maintaining roads nationwide, and often less than that. To make matters worse, the current transportation finance system prioritizes spending on highways and underfunds everything else. While we continue to spend billions of dollars on highway expansions, many states report spending little or no money on transit. With billions of new transportation dollars coming to the states as a result of the federal Infrastructure Investment and Jobs Act, the report argues that it is time to overhaul our priorities. 

“The way we tax and spend for transportation sometimes makes it cheaper to drive a car than take a bus, or drive a gas-powered car than an electric one. That has to change,” says James Horrox, lead author of the report. “We can’t make our streets safer, clean our air and fight climate change with a transportation finance system that provides the wrong incentives too much of the time.”

The report recommends the adoption of a new system of transportation funding based on two basic principles:

  • Charge taxes and fees on transportation that reflect the full costs Americans’ transportation choices impose on society. Cleaner, healthier and more sustainable forms of transportation – like riding a bus or a bike – should ideally be cheaper than dirtier and more dangerous modes, like driving, and transportation taxes and fees should be oriented toward encourag- ing the use of the least-impactful mode for every trip.

  • Prioritize spending on transportation projects based on the benefits they deliver to society. America should prioritize investments that address the nation’s biggest challenges and avoid wasteful boondoggle projects.

“Clean air, healthy communities, safe and affordable options for getting around – these are things we can all agree are important,” said Casale. “It’s time to spend our money like we recognize that.”