Audit: Fuel-Efficient Vehicles Suck Tax Revenue From Louisiana Roadworks Fund

A combination of increasingly efficient vehicles and a fuel tax that hasn’t increased since 1990 has gradually depleted a key fund that Louisiana uses to pay for its transportation projects. In addition, paying down debt from past road and infrastructure works will mean less money from the Transportation Trust Fund will be available for projects over the next decade, according to a legislative audit released Monday.

Auditors said the average fuel efficiency of light passenger cars in the United States has fallen from 18.8 miles per gallon in 1990 to 22.9 mpg as of 2020. Because better mileage vehicles need fuel less often, Louisiana has seen its fuel tax revenue decline as a result.

The audit expects the downward trend in fuel tax revenues to continue as vehicles become more efficient. Louisiana’s 20 cents per gallon tax remained unchanged longer than that of all other states except Mississippi and Alaska. If it had increased according to the indexes of consumer prices and highway construction costs, the tax would currently be 49 cents.

The state has already taken into account the impact of electric and hybrid vehicles on its future fuel tax. Starting January 1, owners of electric vehicles and hybrid vehicles will be charged annual fees of $100 and $60, respectively, to account for their use of the road and make up for what they’re not paying in taxes. on fuel.

The audit predicts that $563 million in fuel tax revenue will be lost over the next 10 years as more consumers buy electric vehicles, but calls for the new fees for electric and hybrid vehicles make up the difference.

“We have anticipated that these charges will be sufficient to offset the impact of externally-electrically charged vehicles on fuel tax collection, but not the impact of more fuel-efficient vehicles. As a result, the state could still lose $322.9 million from calendar years 2023 through 2032,” Legislative Auditor Mike Waguespack said in a letter to legislative leaders.

The audit assumes that electric vehicles will account for 30% of all auto sales by 2032.

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The Transportation Trust Fund is also used to pay for Transportation Infrastructure for Economic Development (TIMED) model projects through a 4-cent levy approved in 1989. Program of more than 5 billion dollars of major construction projects was due to be completed in 2004, but has consistently fallen behind schedule, with major hurricanes adding to the delays.

Debt service to TIMED projects and approved local infrastructure works totaled nearly $310 million from the Transportation Trust Fund (TTF) from 2015 to 2021, the audit calculated.

“In addition, we have estimated that $902.6 million of TTF-Regular funds projected over the next 24 years will be required to supplement TIMED debt, which would also reduce the amount of TTF funding available for the backlog of projects. transportation,” Waguespack wrote.

State lawmakers called for the audit after the state Department of Transportation and Development identified $14.87 billion in unmet highway and infrastructure needs.

The Legislative Auditor recommends that legislators consider linking fuel tax increases to changes in inflation, population or fuel efficiency. Its report also suggests that Louisiana is looking for alternatives to provide “diverse, dedicated, predictable, and sustainable revenue” for building roads and bridges.

As an example, he cites Texas voters’ approval in 2014 to put revenues from oil and gas production into its highway construction fund. The following year, Texas dedicated a portion of its state sales tax, vehicle sales tax, and vehicle rental tax to infrastructure.

In 2008, Florida earmarked a portion of its document tax for transportation projects. Georgia imposed fees, ranging from $50 to $100, on trucks based on their weight to raise more money for roadwork, and it added a $5 per night fee for hotel stays. hotel and short-term rentals.

In Colorado, fees were approved last year for ride-sharing services such as Uber and Lyft, as well as app-based delivery services.

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