Expecting transportation reauthorization to happen, AARP in Transportation Funding Reform: Equity Considerations for Older Americans "examines whether current or proposed transportation funding sources at all three levels of government are in some way inequitable for low-income people, rural residents, people with disabilities, or older adults."
AARP is analyzing this issue now because revenues from the gas tax are decreasing and are increasingly inadequate to pay for our transportation infrastructure needs.
Gas Tax Most Popular Road Fee
While the current gas tax is equitable in that users pay the fees, the current gas tax is described as regressive - disproportionately costing low-income users - and further distributing costs unevenly in that it is a relative bargain for those who own fuel-inefficient vehicles and it does not charge for peak-time usage of the roads. The report also looks at alternatives to the traditional gas tax that have been popping up at the state and local levels. These include tolling and mileage fees.
The report notes that the current federal gas tax only takes into account use, but not impacts.
Many analysts think it is only fair for travelers to pay a fee that takes into account the negative impacts their travel has on the highway itself (through the weight of their vehicle, for example) and the time and health costs they impose on other travelers (when they travel in the peak period or drive polluting vehicles). Without this link, drivers partially escape the financial, pollution, and health costs they impose on others and create excess demand for new highway capacity. Drivers who act to conserve gas end up subsidizing those who do not. For example, off-peak users subsidize peak-period users. Some highway advocates note that paying for public transportation (and underground storage tanks) from the HTF [Highway Trust Fund] breaks the link between those who pay and those who benefit. The transit advocates’ response to this argument is that payments into the Mass Transit Account help offset drivers’ pollution and congestion costs.Three quarters of states charge a gas tax in addition to the federal tax. States also charge user fees for car ownership, licensing, and tolls. In terms of new types of taxes, the report analyzes the equity ramifications of fees based on vehicle miles traveled (VMT) and high-occupancy lane usage (which it finds relatively non-regressive because they are not usually located in areas where people with low incomes travel in great numbers). Not mentioned are public transit fare rates.
Sales and Other Taxes Unrelated to Driving
Though income taxes are the most progressive, they do not account for impact. Property and development-related infrastructure taxes are relatively regressive, while sales taxes are completely regressive.
The improvements funded by a retail sales tax, for example, while failing to link payment to transportation system use, may provide benefits even to people who infrequently travel by car or public transportation. Living in a community with uncongested roads, a good transportation system, or a safe cycling network may have intrinsic value.The report calls for equity in terms of mobility availability for all.
Increased investment in public and community-based transportation options, highway modifications, driver assessment and training, pedestrian facilities, and attention to urban design and land use policies would help to ensure that those who pay receive their fair share of benefits.Fairness for Older Americans
In terms of older Americans, the AARP report observes that they are more likely than the general population to live in rural areas (20 percent of rural residents are over 65) and more likely to live in suburban areas of metropolitan areas. The report's interpretation of the numbers is that 70 percent of older Americans live in "low-density places, where, for example, regular fixed-route public transit use may not be a practical option." Their travel patterns indicate that older people travel more during mid-day than those 16 to 64 and less during rush hours. Their cars are older; they travel less on highways and they do not drive for much of their miles traveled.