The Wisdom of Higher Gas Taxes

I had argued last November that Now Is the Time to Raise the Gas Tax.  So I was pleased to hear that the Legislature’s Transportation Committee is thinking about this very policy.

Motor fuels taxes are the best way to fund highway maintenance and repairs:

They are fair.  Users who put more strain on bridges and roadways, those with heavier vehicles or drive more miles, pay a larger share of the costs.

They are efficient.  The infrastructure for tax collection is in place and gas taxes avoid the borrowing costs of transportation bonds.

They represent a pay-as-you go ethic.  Unlike transportation bonds, the present generation takes responsibility for the costs of transportation infrastructure.  Funding repair and maintenance with bonds is pawning these costs off on future generations.

They can be structured to assess more of our infrastructure costs on people from away.  Imagine a gas tax that is ten cents a gallon higher from May through October so that we collect more from tourists visiting the state.  Just like lodging establishments do, we would charge more when demand is greatest.

They also send a market signal to drivers that it is wise to continue to drive less and to invest in more fuel efficient vehicles.   Higher gas taxes help keep demand for gas from growing again.  Fewer miles driven means better air quality and reduced climate change.

Now is definitely the time to raise the gas tax.

Mark W. Anderson

About Mark W. Anderson

I am proud to be a Mainer, born in Caribou and schooled at Brewer High School, Bowdoin College, and the University of Maine. I am grateful for a 35 year career at UMaine, the last decade in the School of Economics.