How to future-proof Wisconsin’s highway funding

August 23, 2022 — As a way for funding an important public good — highways — Wisconsin’s gas tax was pretty good: It put the cost on users in rough proportion to their use.  

There were legitimate doubts: Was it too high? Was money diverted? Were we getting good value? Some were so vexing that voters acted, constitutionally banning transfers out of the highway fund to general government spending, for example. 

But the big problem is that the gas tax was good. Every credible projection shows it fading as a revenue source as federal mandates and consumer tastes prompt a shift toward electric vehicles and, among remaining gas-powered ones, much more efficiency. More and more vehicles won’t be paying for their share of pavement. Wisconsin needs a replacement for the gas tax. 

Here, legendary transportation scholar Robert W. Poole Jr. of the Reason Foundation and Badger Institute Visiting Scholar Benita Cotton-Orr explore how we can restore highway funding to a user-pays principle. They propose a mileage-based user fee — one that can phase in as a replacement for, not an addition to, the gas tax.  

As we do so, we can fix problems that made Wisconsinites dissatisfied with the gas tax. Their options take advantage of advances in technology, such as the systems that already provide truckers a rebate of taxes on the fuel they burn driving tolled roads in New York and Massachusetts, for example.  

These can make a phase-in seamless for drivers while providing confidence that a revenue shift is not a revenue grab, that it’s an “instead,” not an “and,” even as it provides the resources for highways that give us the freedom to safely travel where and when we need.

Read the full report here