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Report suggests taxing hybrid cars

US highway fund said running low

WASHINGTON -- Taxing hybrids and other fuel-efficient cars and billing drivers for miles driven are among the approaches being suggested to avert a shortfall in money to maintain the nation's highways.

Less than four months after President Bush signed a six-year, $286.4 billion highway and public transit act, a report commissioned by the US Chamber of Commerce said that the federal Highway Trust Fund is running out of money and that Congress needs to think about new revenue sources.

''Decisions are going to have to be made in the very near future," said Ed Mortimer, the business lobby's director of transportation infrastructure, acknowledging it could be a tall order. The next highway bill is years away and lawmakers may be loathe to return to a measure that was widely criticized for being padded with thousands of special-interest projects.

The Senate came to an acrimonious halt recently when a senator suggested shifting to hurricane relief the money from two Alaskan bridge projects, including a $223 million project linking Ketchikan to a sparsely populated island with an airport that critics have dubbed the ''bridge to nowhere." Congress later removed the bridge from a list of protected projects, but money for it is still part of Alaska's share of federal highway dollars.

The recently issued study, commissioned but not endorsed by the chamber, estimated that the trust fund, financed by the federal tax on gasoline, will take in $231 billion over the six-year course of the act, and that the highway portion of the fund would hit a zero cash balance in 2008, a year before the act expires.

The report also concluded that revenues from all levels of government will fall $500 billion short of what is needed just to maintain pavement and bridge conditions and traffic levels through 2015, and $1.1 trillion short of what is needed to improve the nation's infrastructure.

''Without a significant influx of new revenues, our nation's transportation network will also continue to deteriorate, impacting mobility and economic well-being," said Stephen E. Sandherr, chief executive officer of Associated General Contractors of America.

The Transportation Department said in a statement it ''has recognized for some time the growing strains placed on the Highway Trust Fund, which is why Secretary [Norman] Mineta championed the creation of an extensive review of the fund's future in the recently enacted surface transportation bill."

In the short term, the study recommended that the federal gas tax, set at 18.4 cents a gallon since 1993, be indexed for inflation. Of that, 15.44 cents goes to highways, with most of the rest to mass transit accounts.

Last year, the House Transportation Committee backed raising the tax, the only major tax not adjusted for inflation, by 4 or 5 cents to pay for a $375 billion bill. The administration warned the president would veto any bill that increased taxes.

The study argued that the fuel tax has lost one-third of its purchasing power since 1993 and that of the 60 cents per mile that drivers pay, 1 cent goes to federal taxes. Other possible short-term money-raisers include expanded use of tolling and bonds, closing fuel tax exemptions, recrediting interest to the trust fund, and dedicating 10 percent of US Customs import revenues to port and freight facilities.

Proposals for the longer term could be more controversial. One is that owners of hybrids and other alternative fuel vehicles pay a vehicle fee, the argument being that drivers should bear their fair share to fill potholes and fix bridges, regardless of how much or what kind of fuel they use.

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