The Long and Taxing Road. The Gas Tax is Dying. Will Drivers Pay for Highways by the Mile

In most states, drivers are taxed by the amount of gasoline they pump into the tanks of their vehicles. Recently, new technology has allowed some state highway agencies (SHAs) to actually count how many miles cars travel and charge different rates based on where those miles have been driven, thus allowing states to tax motorists based on exactly how much they use certain roads. This is an important innovation as the gas tax--the nation's main tool to finance highways--is in a crisis. The purchasing power of the gasoline tax continues to erode with inflation (its been over a decade since most states have increased their fuel taxes) making it more and more difficult for states to pay for new roads or maintain existing ones. This article discusses possible ways to resolve the structural financing problems facing SHAs today, focusing on solutions such as letting the private sector build roads and charge tolls on them or using more technologically sophisticated methods to calculate the gas tax.