CHARLESTON, W.Va. - State fuel taxes provide for more than one-third of the revenue for the state Road Fund, but that funding source is shrinking as people drive less, and switch to more fuel-efficient and alternate-fuel vehicles, a West Virginia University economist told legislators Monday.
"The traditional reliance we have on the fuel tax is going to have to be examined and alternatives will have to be explored," said Tom Witt, director of the Bureau of Business and Economic Research at WVU.
As recently as 1983, the gas tax accounted for 51 percent of the revenue for the state Road Fund, but that has dropped as vehicles have become more fuel-efficient.
Meanwhile, fuel consumption also dropped in 2008, with estimates that vehicle-miles traveled dropped nearly 3.5 percent, as high gas prices and the recession caused consumers to cut back, he said.
Witt said national policy groups are looking at alternative ways to fund road construction and maintenance, but conceded that many of the options may not be palatable to the public.
Some options include:
Increasing the federal gas tax, which has not increased since 1993, or setting a variable tax rate, based on the price of oil.
Having a tax based on miles traveled, rather than fuel consumption. Witt noted that Oregon is experimenting with a system that tracks mileage using GPS devices on vehicles.
Creation of a national infrastructure corporation to fund road and other construction projects.
Putting tolls on previous toll-free roadways.
Imposing higher registration fees for alternative energy vehicles, to offset the loss of fuel tax revenues on those vehicles.
"These energy-efficient vehicles are going to be using the roads and not paying their fair share of taxes," Witt said.
Wage taxes for road construction projects in metro areas of cities.
Increasing the consumer sales tax, with the increase dedicated to road building and infrastructure projects.
However, Senate Finance Chairman Walt Helmick, D-Pocahontas, said the Legislature will wait to see if short-term help comes from Washington, in the form of road and bridge construction projects as part of the new administration's proposed economic stimulus package.
"In the real world this year, we're probably going to be waiting on the Obama administration for any stimulus package," he said, adding, "The Legislature is not going to be prone to jump at any tax increases this year."
