Why hiking the US gasoline tax is back on the table

(The Conversation is an independent and nonprofit source of news, analysis and commentary from academic experts.)

Wallace Tyner, Purdue University

(THE CONVERSATION) It is well known that the US has a major infrastructure problem with our national highway system. Many of our bridges are in a very poor state of repair and highway maintenance is not keeping up with needs. The American Society of Civil Engineers in 2013 gave the US road system the grade of a D and estimated that US$190 billion would be needed annually to significantly improve conditions.

The main source of funding for highway and bridge investment is the gasoline tax. And with the rapid drop in gasoline prices over the past several months, more commentators and policymakers are saying now is the right time to raise the tax.

Why haven’t gasoline revenues kept pace with highway funding needs? And if taxes should be adjusted, what’s the most effective way to meet highway funding objectives?

Roots of the shortfall

One reason for this highway infrastructure funding issue is that the gasoline and diesel taxes have not been increased since 1993 – 22 years ago. Meanwhile, the costs of building and maintaining our highway system have increased substantially, about 29 % in that time period.

That means that the purchasing power of the fixed gasoline and diesel taxes has fallen to such an extent that the tax revenues cannot meet the growing funding needs of our...