Second SAFETEA-LU Commission Calls for Fuel Tax Increase- Transition to Distance Based Fee

The bipartisan National Surface Transportation Infrastructure Financing Commission released its final report today, unanimously recommending the gradual phase-out of federal motor fuel taxes to be replaced by a distance fee based on "vehicle miles traveled" (VMT). The finance commission is the second of two commissions established in SAFETEA-LU charged with making recommendations about the future direction of the federal surface transportation programs and how they should be funded. The finance commission evaluated a wide range of financing options and concluded that the fuel based user fee system is no longer a viable way to pay for future transportation improvements. It recommended instead a gradual ten year transition to a distance based user fee. To fund transportation needs while this transition is underway, the finance commission also recommends increasing the federal gasoline tax by 10 cents per gallon and increasing the federal diesel fuel tax by 15 cents per gallon. The report also calls for increased use of public-private partnerships, expanded use of tolling, and congestion pricing.  Last week Transportation Secretary Ray LaHood made news when he was misquoted by the national media as saying that the Obama Administration was recommending implementation of the VMT user fee. The White House press secretary responded quickly and said the VMT "is not and will not be" the policy of the Obama Administration.