David Alpert discusses Harry Thomas’ gas station legislation, writing:

There is one unfortunate reason for keeping gas stations: the federal government allocates transportation spending proportional to the gas tax revenue collected by each state. That creates a perverse incentive for jurisdictions near state lines, like DC, to sell as much gas as possible. Congress ought to revise this formula in the upcoming transportation bill, to allocate based on actual driving rather than gas sales.

That’s interesting, and yet another reason why transportation funding should be doled out on a metropolitan basis rather than to states. But I also have to tweak Dave for saying that driving, rather than gas purchases, should be used to determine revenue allocation. This is a bad idea, as it would incentivize states to increase driving. The way to increase driving, of course, is to use the revenue to build more roads, which will lead to more driving, which will lead to more revenue, which will lead to more roads, and so on. Not the most efficient way to design a transportation system.

Instead, funds should be allocated based on need and on efficiency of use — we want to fund projects that will reduce energy use and support the positive agglomerative externalities of metropolitan economies. Now, that can be a tough thing to get at, but there’s one way to make the job easier. Efficient pricing of roads and transit would indicate where transportation demand is highest. At the same time, it would also encourage a more efficient use of land, and it would raise a lot of money. This is what we need — smarter revenue streams to fund smarter transportation investments.