By Giovanna da Silva
Millions of Americans depend on roads in their everyday lives. US roads handle 8 billion miles of traffic per day. For most of America’s contemporary history, federal, state, and local governments have maintained and funded roads. Currently, there are 4 million miles of public road in the country. Gas taxes and other hidden fees disperse the costs of maintaining the road system. Some question the efficiency of funds allocated to maintain road and highway infrastructure.
During the 19th century, private companies financed and maintained roads in the United States through the collection of tolls. The advent of cars in the early 20th century increased demand for paved roads and prompted state involvement in constructing and maintaining roads. Post-World War I America saw developing the road system as an effort to modernize rural areas of the country. In response, states began implementing a gasoline tax to subsidize construction costs. By 1929, all states had adopted gas taxes. Under the Hoover administration, Congress passed the country’s first federal gas tax, the Revenue Act of 1932. The act was born out of the necessity to raise federal revenue during the Great Depression. While lawmakers intended to phase out the tax in 1934, they continued the program because they had come to rely on the revenue it generated.
The federal fuel tax has steadily risen over the decades from its original one-cent fee per gallon. Currently, customers pay just over 18 cents per gallon of gas in federal taxes. Those who use diesel are charged 24 cents per gallon. Tax revenues finance public transportation projects through the federal Highway Trust Fund program.
Florida relies heavily on state fuel taxes to fund roads. Nearly 68 percent of Florida’s road funding comes from fuel taxes and revenue from state tolls. Drivers pay around 13 cents per gallon under the Fuel Sales Tax. Additionally, the State Comprehensive Enhanced Transportation System Tax places a six-cent tax on gas and seven cents on diesel.
States pass down revenue from other gas taxes in Florida to local governments. This includes the two-cent constitutional fuel tax, a one-cent county fuel tax, and a one-cent municipal fuel tax. Local governments directly collect revenue from the Ninth-Cent Fuel Tax that charges one cent per gallon of diesel used and the Local Option Fuel Tax, which is five to eleven cents per gallon of gas and six cents on diesel. In gasoline taxes alone, non-diesel customers in Florida pay roughly 55 cents per gallon of gas when all federal, state, and local fees are combined.
Although fuel taxes make up a large portion of US public infrastructure funding, federal and state governments often experience budget shortfalls. Robert Poole, director of transportation policy at the Reason Foundation, argues that instead of depending on fuel revenue, the government ought to treat roads as a private utility. He maintains that under this model, customers would pay for their use of the road through per-mile highway fees. Highway utility companies would be subject to federal and state regulations in the same way that electric companies are now. He notes that since highway utility companies would assume the responsibility of operating and maintaining roads, they would be incentivized to attract customers by ensuring their roads are in top condition. Due to market competition among utility companies, customers would likely pay less in fees than they currently do by paying state, local, and federal gas taxes.
Drivers on average shell out $296 total in fuel taxes per year. While many negatively view the idea of toll roads, the private sector is capable of offering affordable rates that would be competitive with gas taxes, licensing fees, sales taxes and state tolls that drivers currently pay to maintain public roads.
