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Fewer Miles Driven Means Less Fuel Taxes Collected

American drivers have cut back on the number of miles they drive nine months in a row, and 10 of the last 11 months, based on Federal Highway Administration statistics.

That's good news for environmentalists, and for those who would like to see the United States import less oil. But it turns out to be bad news for federal highway administrators, since a lot of their road-fixing budget comes from fuel taxes.

For a long time, I never thought I'd see that miles-driven number decline. "None of us did," said a spokesman for the FHWA on Oct. 15. Miles-driven kept right on increasing as gas prices passed $2 per gallon, then $3. Miles driven and U.S. auto sales really didn't falter too badly, until gas passed $3.50 and hit $4 per gallon.

But since November 2007 through July 2008, U.S. drivers have driven 53.2 billion miles fewer than the year-ago period, according to the FHWA. The agency said that's a bigger cutback than the 1970s oil embargoes, when Americans cut back 49.3 billion miles. It occurs to me there were fewer drivers then, so maybe per capita, the earlier cutback was greater. It sure seemed that way at the time.

Anyway, those miles-driven numbers have been pretty widely reported, not to mention the bottom falling out of U.S. auto sales.

Less widely reported is the fact that fewer miles driven and fewer gallons of fuel purchased mean less fuel taxes collected. And fuel taxes are the main source of revenue for federal highway money.

U.S. Secretary of Transportation Mary Peters says her department has been raising this issue for a couple of years now, but the Department of Transportation nearly ran short of money last month before Congress passed about $8 billion worth of general funds. The money kept federal highway payments flowing to the states. In the meantime, Peters had cut back earlier from daily payments to states to weekly, to make what money she had last longer.

According to Peters, the federal Highway Trust Fund gets 18.4 cents per gallon from gasoline, and 24.4 cents per gallon from diesel sales. During the first quarter of 2008, motorists used nearly 400 million fewer gallons of gasoline, and 318 million fewer gallons of diesel. Peters advocates other sources for highway funding.

Maybe it's just me, but you like to think that if people drive fewer miles, bridges and highways will last longer and need less money for upkeep. On the other hand, there's just as much weather wearing out the roads, no matter how much people do or don't drive. There must be a lot of lobbyists somewhere, working on these arguments.

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