Highway funding



Congress recently approved another stopgap mechanism by which the federal government will fund transportation spending for three more months while senators and representatives take their August break. That is just one more example of the penchant our elected leaders have for kicking the can down the road, rather than resolving a problem.

Since its creation during the administration of President Dwight Eisenhower, the Highway Trust Fund has derived its revenue from the federal gas tax. That tax has remained at 18.4 cents a gallon since 1993. Construction costs have increased substantially while today’s more efficient vehicles have slowed tax revenue flow to the point where the gas tax now produces only about $34 billion annually, far less than the approximately $50 billion in annual trust fund expenditures.

The gas tax clearly is the appropriate tool for raising money to pay for highway construction and repairs. It is a user tax: you drive, you pay; and if you drive less, you pay less. If additional federal highway funding truly is needed, the time would seem right – with the price of gasoline at the lowest point it’s been for years – to consider increasing the gas tax and indexing it to inflation. Objections to any tax increase notwithstanding, it is entirely appropriate to demand that motorists pay for the roads they use.

But there is a larger issue in all of this. The Highway Trust Fund was conceived primarily to pay for the interstate highway and bridge system. But over the years, its funds increasingly have been diverted for non-highway purposes. An examination of trust fund expenditures by the Cato Institute about a year ago indicated that one-quarter of those fuel tax funds now is siphoned off for mass transit systems in cities around the country and for an array of other non-highway purposes. According to Chris Edwards, director of tax policy studies at the Cato Institute, ending federal aid for transit and other non-highway spending by itself would put the Highway Trust Fund back in balance.

The power of the transportation lobby in Congress is enormous and helps dictate the decisions made by House and Senate members serving on the key congressional committees. Those members often seem more than willing to “bring home the bacon” to satisfy local transportation choices and create local employment. Read: Governor Brown’s California bullet train.

A gas tax increase, not some complex, jury-rigged plan that diverts attention elsewhere, is the appropriate way to keep the Highway Trust Fund in balance should more revenue be necessary. Also, fund expenditures should not be dictated by political considerations, but by the purpose for which the fund was created.

If Congress wants to support other needed transportation systems such as mass-transit, a separate Trust Fund should be created. The Highway Trust Fund should be used only for interstate highways and bridges, as originally intended when established some sixty-odd years ago.

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