Abstract
The principal obstacle to reauthorizing the federal surface transportation program is a dispute over the size of the program and the amount, if any, of an increase in federal fuel taxes. A gap of $125 billion (over 6 years) separates the Bush Administration’s proposal from that of the House of Representatives, with the latter favoring a large fuel tax increase. This article suggests that a significant expansion of tolling and public-private partnership options for states could lead to $50 billion in net new investment over 6 years, whereas indexing of fuel taxes could add another $15 billion. If both anti-tax conservatives and the highway community could agree to such a compromise, America could achieve a much-needed increase in highway investment without a “tax increase” in the normal sense.
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