First steps toward a coherent transportation revenue plan

First of three parts

THE BIDEN ADMINISTRATION’S recent announcement that it will strengthen national pollution standards for passenger cars, light-duty trucks, and medium-duty vehicles for model years 2027 through 2032 and beyond, will likely be a powerful nudge to increase the production and purchase of more plug-in hybrid electric vehicles and electric vehicles. While the transition of the American vehicular fleet from the internal combustion engine to electric or hybrid electric will take longer than many people would like, as I have written before, this transition is not a question of “if” but rather one of “when.”

With this transition comes a variety of challenges and opportunities, and a glaring challenge will be replacing gas tax funding with one or more new revenue sources.  Massachusetts seems ready to begin discussing this issue in earnest as the governor has appointed a special task force to consider the future of state transportation funding.  At the same time, we face a more imminent challenge, potentially a crisis, of a seriously underfunded public transportation system that needs to be addressed in the very short term. 

These issues – the short-term need to generate ample net new revenue for the MBTA and the state regional transit authorities (RTAs), and the long-term need to find a permanent, fair, and viable replacement for the gas tax – intersect, and it’s important to understand this as policymakers decide what course to take.

The formation of the governor’s task force has sparked a lot of interest in the topic of “congestion pricing,” which is an over-used phrase often misunderstood, and too often misused.  Congestion pricing is certainly one form of road user charging, but it is frequently used as an imprecise proxy for the various ways a state can charge for the use of its roads, bridges, and tunnels. What I’d like to do in this series of articles is offer a more accurate and precise understanding of the variety of options available to decision makers as they consider how Massachusetts might raise net new revenue for our transportation needs.

Let’s start by asking and answering three fundamental questions.  How these questions are answered is a critical first step toward advancing a coherent revenue plan.

Question 1: Do we limit our efforts to fund the transportation sector by looking only (or primarily) at transportation sources?  If the answer is “yes,” then we would not consider approaches like raising the state sales or income tax.  I assume that most decision makers will want to look first to transportation sources, so let’s take that as a fundamental assumption going forward. That leads to …

Question 2: When considering a replacement for the gas tax, will we charge for the ownershipof the vehicle, the useof the vehicle – or both?

Charging for ownership includes devices such as annual registration and inspection fees, sales tax on vehicle purchases, perhaps a fee on owners of more than one vehicle, and fees assessed according to vehicle type. 

If the state decides to charge people for ownership, the assessments should not fall within a “one size fits all” framework.  Vehicle type could be an important and fair way to assess vehicle ownership, because size and weight have significant negative impacts on public health and safety.

There is a plethora of data showing the negative impacts on heavier vehicles on pedestrian injury and death, and on the emission of dangerous particulate matter (including from tires, brake pads, and road friction) which has been conclusively shown to be a danger to public health.

These health impacts are measurable, as are the costs of added wear and tear of the roadway infrastructure caused by these heavier vehicles.  For example, one study recently found that for every 1,000-pound increase in vehicle weight, the baseline fatality probability increased by 47 percent.  Another found that because they are heavier, electric vehicle emit 3-8 percent more PM2.5 (from brakes, tires, and road surfaces), and we know that PM2.5 is a hazard to public health.

If you are charging for use of the vehicle, then you need to consider the variety of ways you can implement a road user charge. This leads to a third fundamental question …

Question 3: If you are deploying a road user charge method of replacing the gas tax, are you doing this to (a) raise revenue, (b) influence driver behavior, or (c) both?

One might consider that raising revenue by any form of road user charge, by definition, influences driver behavior – but the answer is a bit more nuanced than that.  We currently charge tolls for the use of any of the Boston Harbor crossings, and that does not seem to have any significant effect on driver behavior. Many factors come into play, including route choice and viability of route options, as drivers make decisions regarding their journey.  My point here is simply to observe that decisionmakers really ought to know why they are deploying any form of road user charge, and craft the method of charging appropriately.

Now that we have the preliminaries out of the way, let’s take a deeper dive into two topics of immediate concern.  One is the urgent need to consider the best long-term path forward for stable, fair, and ample revenue for the MBTA and the state’s RTAs.  The second is to explore road user charging in depth because. almost invariably, the views I have seen expressed in recent weeks by a number of pundits and politicians are uninformed, incomplete, or outright wrong. I am concerned that misinformation, or incomplete information, can find its way into the media narrative, and once that narrative has set, no level of effort can break its vise-like grip on the public debate. The great danger, of course, is that the misinformation gets ingrained into the media narrative and becomes the basis for official decision making. 

In the next two installments of this series, I will explore each of these issues in a way that I hope will break through the web of misunderstanding that I see plaguing the public debate. Massachusetts has an opportunity now to move away from the old, regressive transportation revenue policies that were not only unfair and disconnected to any coherent framework, but also deeply inadequate as they rarely, if ever, raised sufficient revenue to actually meet our transportation needs. 

The task ahead is not simply to identify new revenue sources that are fairer (socially and regionally), but also to identify sources that collectively raise ample revenue that meets our needs fully in the long-term.

James Aloisi is a former Massachusetts secretary of transportation.