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Gas-Tax Hikes Only Fuel the Problem
In the era of the earmark, it would be insane to entrust any additional transportation dollars to Congress
By Phil Kerpen
The country’s transportation infrastructure has received long-overdue attention in the wake of the tragic bridge collapse in Minnesota. Throwing more money at the problem is the immediate impulse of many commentators and politicians. Unfortunately, highway funding at the federal level is rife with abuse, diversion, and mis-prioritization, mostly because of the practice of earmarking — a method by which politicians steer funds to politically favored projects, regardless of whether they are legitimate priorities.
And until earmarks are eliminated, higher gas taxes in the name of rebuilding our transportation infrastructure would simply throw good money after bad.
The Federal-Aid Highway Act of 1956 established the Highway Trust Fund to ensure that revenues from a gas tax and other transportation taxes would be used only to fund the construction of the Interstate Highway System, which was considered a federal responsibility for national defense reasons. The system was supposed to be completed by 1969, at which time the gas tax would sunset. Of course, as with so many taxes, the gas tax not only didn’t sunset, it increased. In 1983 it was hiked from 4 cents a gallon to 9 cents, with 1 cent diverted to the newly-created Mass Transit Trust Fund for projects, mostly in a handful of big cities, that have nothing to do with highways.
Since then, the misuse of Highway Trust Fund dollars has only worsened. In particular, since the passage of the 1991 highway bill, funds raised from motorists at the pump have been diverted to bicycle paths, scenic landscape designs, pedestrian walkways, parking garages, and any number of non-highway projects.
This diversion of highway dollars is a bipartisan problem. One of the worst excesses of the recent Republican Congress was the 2005 highway bill, which diverted more than $20 billion in federal gas-tax dollars to 6,373 pork-barrel earmarks — including the infamous “Bridge to Nowhere,” pedestrian and bike trails, and new park signs. Many of the earmarks were for roads and legitimate bridges. But the very nature of the earmarking process results in the substitution of one lawmaker’s political judgment for the priorities of the state officials on the ground. Even those seemingly reasonable earmarks are not properly prioritized.
The change in congressional control does not appear to have improved matters. The Democratic majority’s first opportunity to set transportation funding priorities came with this year’s transportation appropriations bill. Yet that bill fails to prohibit funding for any of the earmarks authorized in the 2005 highway bill. It also spends an additional $2.2 billion on another 1,400 earmarks, according to Taxpayers for Common Sense.
The evidence could not be clearer: Motorists are not receiving good value for their federal gas-tax dollars. Under these circumstances, it would be insane to entrust any additional transportation dollars to Congress by way of a higher gas tax.
In the best-case scenario, Congress would eliminate earmarks and dedicate existing highway funds to urgent infrastructure needs. But if Congress is incapable of such fiscal responsibility, the federal gas tax should in fact be cut, which would grant states greater control over the maintenance of their highways and bridges.
U.S. Rep. Scott Garrett (R., N.J) will soon reintroduce legislation that would accomplish this goal in a very elegant way. His bill would allow states to opt out of the federal gas tax and raise their own gas taxes with a cent-for-cent offset in the federal tax. States would be permitted to shift as much as 16.4 cents of the 18.4 cent tax to the state level, with a minimum of 2 cents remaining to fund projects that are necessarily federal in scope. This approach would allow decisions on transportation priorities to be made at the state level — far away from political manipulation in Washington.
State transportation systems are hardly perfect, but the federal system is so badly broken that it’s hard to imagine Garrett’s formula not being an improvement. Moreover, shifting power to the states will allow the states to compete with each other and serve as laboratories of innovation.
The federal highway system is rife with abuse, thanks in good part to the political diversion of funds through earmarking. Increasing the federal gas tax in this environment should be off the table, while cutting it should be on. Congress must either demonstrate its ability to administer highway funds without pork-barrel earmarking, or give the states an opportunity to manage their own highway funds.
— Phil Kerpen is policy director for Americans for Prosperity.