Congressional Budget Office sees value of tolls over taxes

Prepared testimony by the Congressional Budget Office (CBO) to the US House transport committee Mar 27 emphasizes the value of substituting tolls for taxes.

It states: "Tolls can be used to raise prices specifically for busy roads, and congestion pricing can adjust charges to motorists for travel on particular roads depending on the amount of traffic. Technology is increasingly making possible the routine assessment of usage charges without the delays associated with toll booths in th past. These methods of revenue collection could be a major improvement over fuel taxes in their ability to link the prices paid by drivers to travel distances and traffic congestion."

Most of the testimony is about the uncertain future of the fuel tax based Highway Trust Fund mechanism for federal grants. The highway account of the fund will be exhausted "at some point during fiscal year 2009" the CBO predicts. Fuel tax receipts are projected to grow less rapidly than the economy - by about 1.5% a year 2007 to 2017 vs growth in the economy in the range 4 to 5%/yr.

However the CBO emphasizes these projections are highly uncertain.

Given fixed per gallon tax rates fuel tax receipts are related only to the volume of fuel consumed, and improvements in fuel economy of motor vehicles therefore undercut tax receipts.
TOLLROADSnews 2007-04-06