Research Rest-Stop | How does the public feel about higher taxes for transportation?

The transportation funding crisis has recently made the news (see here and here), although it is not a recent phenomenon.  For the past several decades, revenues from both the state and federal gas taxes have declined in relation to inflation, while transportation infrastructure continues to age and major upgrades become increasingly pressing (MTI, 2014). Faced with failing infrastructure, governments are forced to seek new means of funding transportation. The question is how?

The Mineta Transportation Institute (MTI), based in San Jose,  recently published research investigating public support for increased taxes to fund transportation. Researchers surveyed the public’s reaction to three tax scenarios: (1) raising the federal gas tax rate, (2) creating a new mileage tax, and (3) creating a new federal sales tax. They surveyed 1,503 randomly chosen individuals nationwide in spring 2014 to test public support for the three tax options.

In general, the researchers found that a majority of people would support higher taxes for transportation. There are, however, some conditions. Respondents favored a gas tax increase over all other options, but only if they believed that revenues would be used for projects related to transportation maintenance, safety, and improvements such as upgrading to a newer technology. A gas tax to fund transportation improvements with environmental benefits, such as addressing local air pollution and global warming, was also well supported. When a gas tax increase was proposed without a clear purpose or with implications to driver’s annual costs explicitly cited in the survey questionnaire, researchers saw support for the tax decrease. In addition, a phased tax increase received more support than a one-time increase when no other information about tax purposes was provided to survey respondents.

MTI researchers found that in response to a proposed mileage tax, respondents much preferred variable rates tied to a vehicle’s pollution level over a flat-rate. In fact, a flat rate mileage tax was the least supported option of all. Interestingly, support for a new federal sales tax fell in the middle.

The Mineta researchers also investigated whether certain characteristics made individuals more likely to support higher transportation taxes.  They found that people who use transit and consider transportation as a key priority are more likely to support higher transportation taxes.

The study also suggests that the demographic subgroups most likely to support higher transportation taxes are Asians/Asian-Americans and blacks/African-Americans, registered Democratic voters, youths (18 to 24 years).

Additionally, the research explored public opinion on three options, shown below, for funding expansions and improvements specifically to public transit.

Research revealed that not all respondents were familiar with how transit is funded. In fact, only half of them were aware that fares do not cover the full costs of running public transit.

During the five years that MTI has been conducting this annual survey, it has found that support levels have not changed much. Public support for transportation taxes has generally risen slightly, with the largest boost in support for a variable-rate mileage tax.

Key implications of the study are that the basic concept of a gas tax increase or a mileage tax is not popular, but that modifying tax structures and linking taxes to safety and environment benefits can increase support. MTI highlights the fact that respondents of the youngest age group (18-24 year old) were much more supportive of any transportation tax option. They suggest that if this is reflective of a generational shift, rather than views at different life-stages, increased taxes for transportation could receive more public support in the future.

MTI’s questionnaire asked about support for tax proposals described in only general terms. Therefore, the results cannot indicate support for or against any specific proposal that may be put forward to fund transportation. The research instead indicates the public’s likely preferences and patterns of support vary in relation to how new taxes are both structured and how their benefits are described and “framed” in public debate. For more details about the research findings, visit here.