The Car and Truck Fleet and Leasing Management Magazine

Americans Drive Less, Gas Tax Revenues Decline

December 13, 2008

WASHINGTON, D.C. --- Americans drove more than 100 billion fewer miles between November 2007 and October 2008 than the same period a year earlier, making it the largest continuous decline in American driving in history, said U.S. Transportation Secretary Mary E. Peters. As a result, gas tax revenues are down considerably.

"As driving decreases and vehicle fuel efficiency continues to improve, the long-term viability of the Highway Trust Fund grows weaker," Peters said. "The fact that the trend persists even as gas prices are dropping confirms that America's travel habits are fundamentally changing. The way we finance America's transportation network must also change to address this new reality, because banking on the gas tax is no longer a sustainable option."

Peters noted that Americans drove 3.5 percent less, or 8.9 billion fewer vehicle miles traveled (VMT), in October 2008 than October 2007, making it the sharpest decline of any October since 1971.

For the second month in a row, the data show the South Atlantic region -- a bloc of eight states and Washington, D.C. -- experienced the biggest decline of any region, 5.0 percent fewer VMT compared to the previous October. At 8.4 percent fewer VMT, Montana led the nation with the largest single-state decline that month. Utah and South Carolina followed with declines of 7.4 percent and 6.7 percent, respectively.

The Highway Trust Fund, the federal government's primary source for financing highway, bridge and transit projects, took in substantially less in fiscal year 2008 than in the previous year. As a result of the continued decline in VMT and the use of more fuel efficient cars, the Highway Trust Fund, which is primarily funded through federal gas tax receipts, collected $31 billion in revenue between October 2007 and September 2008 -- $3 billion less than it collected in fiscal year 2007, while federal transportation spending increased by $2 billion.

"This underscores the need to change our policy so American infrastructure is less dependent on the amount of gas American drivers consume," said Federal Highway Administrator Tom Madison.


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