rate of 2.7 percent per year. In the early

rate of 2.7 percent per year. In the early part of 2007, according to a DOT presentation on highway trust fund balances, Americans drove fewer miles than the same period the year before - for the first time ever. When Americans drive less, they buy less gasoline and pay less in gasoline taxes.

There are reasons to believe the gas tax shortfall will get worse. As Duvall and Kendall observe, the major thrust of federal energy and environmental policy in both the Republican Bush administration and the Democratic Congress is to reduce gasoline consumption. The federal government is encouraging the purchase of gallon-pinching hybrid-electric engines, and House Speaker Nancy Pelosi has called for increasing the average-fuel economy standard to 35 miles per gallon by 2020. Meanwhile, the feds are subsidizing research into new technologies such as hydrogen-powered fuel cells, with the goal of creating engines that require no gasoline at all.

Recent projections reported by the Transportation Research Board suggest that with current technology, fuel economy improvements of 15 percent to 25 percent are possible within the next two decades. If Americans drive their automobiles fewer miles and get better gas mileage while they do it, the U.S. will face a steady decline in the number of gallons of gasoline sold and taxed. The implications have yet to be factored into federal transportation policy.

Barbara Reese, chief financial officer of the Virginia Department of TVansportation, insists that VDOT’s six-year financial plan is based on conservative financial assumptions. The DOT highway trust fund issues highlighted by Duvall and Kendall have been widely discussed in the transportation community, she says. Indeed, Kendall (recently addressed the Virginia Transportation Construction Alliance at the Homestead.' "These issues have been talked about," Reese says. "Everyone should have antici