Just about everyone in transportation now agrees that fuel taxes are not a sustainable long-term source of highway funding. And in recent months it has begun to dawn on the transportation community that the days of ever-increasing federal funding for transportation are over. The looming insolvency of the federal government means that general-fund supplements to the Highway Trust Fund are not sustainable, either.
I have been arguing for several years that we need to begin a transition from fuel-based highway user taxes to mileage-based highway user fees. And that the most feasible place to begin this transition is on the limited-access highway system—Interstates and urban expressways. Converting these systems to all-electronic tolling (AET) and dedicating the revenues to the (re)construction, operation, maintenance, and expansion of those systems would resolve their funding problems, reduce urban congestion (thanks to variable toll rates), and be a major first step in the transition to mileage-based user fees.