The declining gasoline consumption is examined in terms of price elasticity, and it is shown how, in some states, gasoline tax revenues are falling to critically low levels, intensified by inflation in the highway construction industry. Data are presented that show that the states' declining revenues will be insufficient to cover projected state highway capital construction programs unless new sources of income are tapped or existing tax rates increased. The price of gasoline, the switch to urban transit, the lower speed limits, and a voluntary reduction in travel have all contributed to the decline in gasoline consumption. From 1968 to 1973, gasoline tax revenues increased at a rate of 8 percent a year. In 1974, the revenues will be about 2 percent below 1973 revenues and 10 percent ($900 million) below 1974 revenues projected before the petroleum shortage. This and other factors which have led to an erosion of the highway construction dollar are discussed. Alternative sources of revenue for highway construction include: a sales tax on gasoline; a sales tax or excise tax on the purchase price of motor vehicle with rates ranging from 2 to 4 percent; and highway bonds.

  • Supplemental Notes:
    • Presented at the Financial Management Conference, New Orleans, Louisiana, September 5, 1974.
  • Corporate Authors:

    Federal Highway Administration

    1200 New Jersey Avenue, SE
    Washington, DC  United States  20590
  • Authors:
    • March, J W
  • Publication Date: 1975-10-2

Media Info

  • Features: Figures; Tables;
  • Pagination: 29 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00141063
  • Record Type: Publication
  • Contract Numbers: HPR-40
  • Files: TRIS, USDOT
  • Created Date: Oct 6 1976 12:00AM