Commission Calls for Gas Tax Increases for Roads
Commission Creates Political Cover for Congress
Jan 3, 2009
The National Commission on Surface Transportation Infrastructure Financing (NCSTIF), a 15-member panel created by Congress, has called for increasing the current 18.4 cents a gallon federal tax on gasoline and the 24.4 cents a gallon tax on diesel. State fuel taxes vary from state to state. The NCSTIF says that American roads and bridges are in disrepair and a tax increase is needed.
Highway Trust Fund Established to Build Interstate System
In 1956, the Highway Trust Fund (HTF) account was established by Congress to provide a reliable source of funding for the building and maintenance of the Interstate Highway System. The HTF is funded by the federal gas tax, and taxes on truck and tire sales. The idea in 1956 was that users of the system would pay for its construction and maintenance.
The interstate system is designated the Dwight D. Eisenhower National System of Interstate and Defense Highways. This is because the Constitution did not give Congress authority to build roads, (except post roads). The fiction is that the system is for national defense. The Highway Trust Fund was created so that highway users paid for roads.
Gas Taxes Not Used Exclusively for Highways
The HTF paid for roads until 1983. That year HTF fuel taxes went from 4 cents/gallon to 9 cents/gallon. A penny of the tax went to Mass Transit. Since then, revenues for Mass Transit nearly tripled to 2.86 cents/gallon. During the 1990’s the gas more than doubled. However, most of the 1990’s increase went to general revenues and not to highways. In 1990 a portion of the tax was diverted to other funds, a diversion that continues currently.
Mass Transit Does Not Pay for Itself
NCSTIF documents indicate that mass transit fares pay for only 28% of the expenses of mass transit. The rest of the revenues come from local, state and federal subsidies, including the HTF.
Transit projects are the source of significant federal pork barrel spending, and the services of these projects cannot support themselves. For mass transit to be economically self supporting, fares would need to more than triple. Taxpayers at all levels of government are paying for services that could not be sustained by a demand for the service. Fare increases make more sense than gas tax increases.
America Responds and Government Seeks Tax Increase
Americans have gone through the shock of $4/gallon gasoline. They have changed driving habits and are buying more efficient vehicles. In the twelve months ended October, 2008 they drove nearly 100 billion fewer miles. Motor fuel tax revenues have dropped as a result.
The government has promoted driving less and increased fuel efficiency for years. Americans are now responding. Government’s reply is to propose a tax increase to reward the behavior it has sought.
Less Fuel Used, Less Driving, Less Wear on the Highways
Among the ways fuel efficiency is achieved is by lightening vehicles. Among the ways consumption of gasoline declines is by driving fewer miles. Both of these result in less wear and tear on the highways, which should mean less maintenance needed.
It should mean the ability to maintain our roads with smaller revenues, if all the revenues generated by road use were employed in road maintenance. Revenues that are designated as user fees should benefit the users that pay them.
Assure Efficient Use of Funds
Among the allegations against Illinois Governor Rod Blagojevich is the solicitation of campaign contributions for highway construction contracts. Contractors certainly build such contributions and related expenses into construction costs. This practice is surely not limited to Illinois. Establishing a Federal Inspector General to oversee efficient and legal use of federal funds should be considered before a tax increase.
NCSTIF Gives Congress Political Cover for Tax Increase
The NCSTIF was created by Congress, and came up with a tax increase recommendation. Politicians can point to this report to dig deeper in the pockets of drivers and truckers with no guarantee that the funds will be used for roads and bridges. The answer is much simpler, use the Highway Trust Fund for highways ensuring the money is spent legally and efficiently.
 |
 |
 |
