America’s huge community of greater than 4 million miles of public roadways connects cities, items and folks. Sustaining this important infrastructure requires a patchwork of federal, state and native oversight — and an equally complicated funding system. A big share of that funding comes from gasoline taxes, however as client habits shifts, this mannequin is changing into more and more unsustainable. In response to current polling from the American Client Institute, shoppers embrace shifting the tax towards those that trigger probably the most injury.
The 2025 Infrastructure Report Card gave America’s roads a D plus, noting that deteriorating street circumstances elevated client prices by $725 per motorist in 2023. Three-fourths of freeway spending comes from state and native governments, whereas the remainder is roofed federally. Fuel taxes — collected on the federal and state ranges — play a big position. On the state and native degree, gas taxes cowl about 26% of expenditures, whereas they make up greater than 80% of the federal freeway fund.
This technique is exhibiting its age. As a result of gasoline taxes are flat charges per gallon, their worth erodes with inflation. Worse, they don’t account for contemporary automobile traits. As extra drivers swap to fuel-efficient hybrid or electrical autos, gasoline tax revenues decline, at the same time as street use and upkeep wants develop.
Whereas gasoline taxes as soon as resembled a consumer price, the decline in revenues means states are more and more drawing from their common fund to finance street upkeep and repairs. Which means that some non-drivers are pressured to pay for companies they don’t use.
Heavy vans account for 40% of street put on and tear, but solely 10% of whole miles pushed. A fairer and extra future-ready mannequin prices primarily based on street utilization and impression. That’s the place “automobile miles traveled” charges are available in. Not like gasoline taxes, automobile miles traveled charges could be tailor-made to replicate precise utilization, injury induced, and even automobile sort, doubtlessly closing the funding hole with out overburdening typical shoppers.
Fuel taxes are sometimes regressive, disproportionately affecting lower-income drivers. The American Client Institute highlighted this in 2021, noting that these taxes disproportionately burden individuals who can least afford them.
Early analysis suggests {that a} automobile miles traveled tax will extra effectively elevate funds because of the lack of ability of some drivers to bypass the tax and the elevated gas effectivity, which contributes to a decline in income.
Customers agree. Notably, practically 70% of ACI respondents mentioned they help a mileage-based price in its place funding mannequin after studying concerning the disproportionate share of roadway injury from heavy autos.
A well-designed automobile miles traveled program might section out the outdated gasoline tax and supply a fairer, extra sustainable answer to infrastructure funding, primarily if it focuses first on high-impact customers akin to business fleets. Modernizing how we pay for roads is lengthy overdue.
Tirzah Duren is the president of the American Client Institute
