“Self-driving cars won’t work until we change our roads,” wrote Andrew Ng, chief of research at Chinese tech giant Baidu. Though Ng may exaggerate, autonomous vehicles (AVs) do benefit greatly from “smart infrastructure.” Witnessing AVs’ rise, American governments have eagerly begun smart infrastructure projects, but few have developed stable methods of funding them.
In this paper, I explore the funding mechanisms that exist today—the national gas tax, pooled and local financing, and AV mileage taxes—and evaluate their track record, future feasibility, and ability to make the largest beneficiaries pay a proportionate share. While the federal government has dedicated decreasing amounts of gas tax revenue to smart infrastructure, it also distributed gas tax dollars in the Smart City Challenge, an innovative contest that successfully if unsustainably drew in private contributions. Meanwhile, the Connected Vehicle Pooled Fund Study and Atlanta’s North Avenue Smart Corridor show how states and localities have self-funded intelligent transportation systems through general revenues. However, none of these methods impose costs on smart infrastructure’s largest users to the same degree as AV mileage fees, seriously considered in Tennessee and other states.
No funding stream has simultaneously levied costs proportionately and dedicated its revenue back to smart infrastructure. The Smart City Challenge and especially AV taxes have come closer, but both involve political tradeoffs. In coming decades, autonomous vehicles and their supporting infrastructure offer a chance to rethink the fairness of transportation finance and the role of the public and private sectors in the city of tomorrow.