broken_downby James A. Bacon

The nation’s roads and bridges have a feevah and Josh Voorhees has a cure: mo’ money for the federal Highway Trust Fund. Writing in Slate, Voorhees highlights Congress’ inability to find new revenue sources to replenish the fund, which faces an $18-billion-a-year shortfall every year over the next decade.

“Current tax rates—18.4 cents per gallon of gasoline, 24.4 cents per gallon of diesel fuel—aren’t enough to prevent America’s roads from crumbling and bridges from collapsing,” he writes. Bridges are structurally deficient, he reminds us, urban highways are congested and too few Americans have access to mass transit. Adding urgency to the situation, he notes that America’s road system is ranked only 18th globally — the U.S. is losing its economic competitiveness!

The good guys in his article are those who implemented, or at least advocated, higher federal taxes for transportation. Alas, he laments, “Recent history suggests such days of good policy winning out over good politics are behind us.”

The fact is, there hasn’t been good transportation policy at the federal level for the decades. The federal gas tax, enacted by Herbert Hoover, was necessary to pay for construction of a system of national highways. That it did, quite successfully. But federal programs never declare, “Mission Accomplished.” They morph into something new. And the “Highway” Trust Fund has evolved into a program that doesn’t just underwrite construction and maintenance of highways but one that subsidizes mass transit and all manner of other non-road spending, not the least of which is the cost of administering the federal program itself.

The best thing Congress can do is dismantle the federal transportation bureaucracy and transfer the gas tax revenue to the state transportation bureaucracies. It is axiomatic here in Virginia that federal money bogs down the lengthy approval process for transportation projects with even more bureaucratic process and, thanks to the strings attached, runs up the construction costs. Cutting Uncle Sam out of the loop would save both time and money.

I harbor no illusion that states are any less likely to spend money on boondoggles than Uncle Sam. While the states are closer to “the people,” they are also closer to developers and other special interests who lobby for projects that benefit them at the expense of the public. But cutting the federal strings and overhead at least would make the boondoggles cheaper.

The conventional wisdom conveyed by Voorhees’ article is riddled with other assumptions that I do not accept such as, for example, the notion that the federal government should do more to offset maintenance under-funding. The under-funding of maintenance is a problem, perversely enough, that the Highway Trust Fund helped create. The program entices states to undertake expensive mega-projects by sharing the up-front capital cost. States leap for the “free” money to help cover the up-front costs — the problem is especially prevalent with mass transit projects — oblivious to the fact that new capacity adds to ongoing maintenance and operations costs. States overbuild their transportation systems, maintenance & operations obligations escalate, and they scrimp on repairs to find money for the next new project.

Another issue: In the business world, corporations continually review their portfolios of assets, sloughing off divisions and subsidiaries that don’t justify continued investment. When was the last time the state or federal government ever reviewed its portfolio of transportation assets? Once a road gets built, it never gets downsized. How many lane-miles of highway serve counties with dwindling populations? How many country roads revert from paved to gravel? The United States has erected a system that only grows and never retracts. As long as Uncle Sam is doling out cash, states have little motivation to reconsider.

These and other travesties can happen only in a country in which citizens are convinced that “someone else” should pay to build and maintain everything from city streets to highways, bicycle lanes to light rail lines… a country in which there is no accounting for life-cycle costs… a country in which transportation planning is divorced from land use planning… a country in which accountability for results is diffused between federal, state and local governments…

I don’t mean to pick on Voorhees — many others think as he does — but the idea that raising taxes is the default solution to our nation’s transportation challenges is ludicrous beyond words. The transportation system does need more investment. But until the ramshackle structure for financing highways, bridges and rail is fixed, Americans should have no confidence that the money will be well spent.

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13 responses to “Mo’ Money for a Broken System?”

  1. larryg Avatar

    I think anyone who contemplates transportation funding in Va needs to mosey on over to

    and scan down the Columns on page 3 and 4 that say: FY 2014 Revenue Estimate.

    First on page 3 – note what percent of State funding comes from the gas tax.

    then on page 4 – go to the row that says:

    Other Revenues: Federal Grants and Contracts $929,928

    That’s 929 million dollars from the Feds.

    that number would shrink to about 600 million if we bail out of the Fed trust fund but keep that tax.

    at that point – all the transit in Va would be de-funded.

    and no doubt – they’re going to claim that they are entitled to the money from the sales tax – 837,800 (on page 3).

    that would put a 837 million hole in maintenance that would have to be filled from the Fed gas tax.

    that would leave virtually no money for new construction – which if I read Jim Bacon correctly – would be a good thing – killing a de facto slush fund.

    then from that point on – new roads would be paid for with electronic tolling (and the Feds want to loosen restrictions and allow tolling on existing interstates).

    I’d actually support that.

    1. – give the sales tax to transit and rail
    2. – continue to require maintenance to get first dibs on the money
    3. – major new roads/tunnels paid for with tolls from now on.
    4. – local counties who want new roads – use the money they get right now for taxing autos.
    5. – get rid of local transit if the locality does not want to pay for it.

    Now I do expect DJ to go ballistic about NoVa “funding” Va and all that rot but I’m curious is he and Jim would call me a lefty left wing liberal for advocating what I have above.

    the thing I’ve noticed is that it’s those on the right who get their rumps in a twist on tolling roads. Go figure.

  2. Peter Galuszka Avatar
    Peter Galuszka

    Bacon, you amaze!

    The best thing we can do is dismantle the federal highway bureaucracy because it takes them too much time to approve new projects? Geez-Louise! You just went through hundreds of words slicing up the new U.S. 460 — a STATE and VDOT project gone beserk. The only reason it was stopped was because a federal bureaucracy, the Corps of Engineers, questioned it.
    You are a hell of reporter but once you get into dogma-mode, it all goes bad.

    1. I did not say to dismantle the Army Corps of Engineers. That’s not part of the highway bureaucracy — it’s part of the environmental bureaucracy, which I do not advocate dismantling!

      I will concede that the FHWA managed to stall the Charlottesville Bypass long enough for the McAuliffe administration to come along and scrap it. That saved taxpayers about $200 million. But federal rules and regulations have cost waaaay more than that over the years.

      1. larryg Avatar

        re: ” I will concede that the FHWA managed to stall the Charlottesville Bypass ”

        I’d say that FHWA was reading a letter written by SELC raising serious questions about VDOT not using current data …

        I think SELC had far more to do with Cville and 460 than is recognized – not that they are able to stop a project but they are able to stop a project that VDOT has ignored NEPA rules on.

        The legal process does not ever kill a road. VDOT and FHWA are free to build the most terrible road ever – as long as they disclose the impacts and that’s where SELC gets their legal juice.

        if you don’t produce an accurate and truthful NEPA doc – and there is a group like SELC around – it’s risky business.

        Va was almost a billion dollars into the 460 project and had two big problems. First the had grotesquely underestimated impacts to wetlands and refused to correct it …

        and second the COE was bound an determined that VDOT would honestly represent the impacts – and SELC was in the wings waiting to challenge any action from FHWA – that was based on faulty data.

        Again – NEPA … NEVER requires a particular decision – but it totally requires complete and accurate data upon which to make a decision.

        but VDOT (and they are not alone) regularly dislikes the idea of actually disclosing actual impacts.. and they’d actually get away with it – if there was no SELC. FHWA will approve a NEPA that has no challenges.

    2. larryg Avatar

      well the 460 project was funded with Federal GARVEE loans … money we borrowed from future other projects…

      that we gave at least 300 million to the same company that build the Pocahontas Parkway – but had not dug one shovel of dirt.

      And apparently, we have to pay them a penalty to get out of paying them the remaining 500 million (that we intend to borrow from the Feds).

      I don’t know how much worse it can get..

    3. larryg Avatar

      we actually starting to accumulate a plethora of contradictions.

      Bacon opposes actions in response to global warming

      but he supports regulations for clean air, the Chesapeake Bay cleanup and stormwater changes but none of these provide any better “proof” of their cost-benefit than highways are global warming provide.

      so we split the baby – kill transportation and climate funding and approve cleaner air, Chesapeake Bay and stormwater…

      very puzzling…

  3. 1) The gas tax is the closest we come to a “user pays” system. But the user is paying next to nothing. The Victoria Transportation Policy Institute puts the externality cost of our driving at 54 cents per mile.
    2) The only county in the OECD with lower average gasoline prices than we do is major oil-exporter Mexico.
    3) A 2006 analysis of mostly defense-related externalities indicated we should be paying an additional $10.06 per gallon in gasoline taxes.
    4) Against income, we pay today only about a dime more for a gallon of gasoline than our great grandparents paid in 1920.

    Any rational thinker, including Nobel prize winning economists, say that the smartest policy leading to intelligent transportation begins with reasonable gasoline taxing. Even Shell Oil and Ford Motor Company have expressed that reality in the past.

    1. larryg Avatar

      well if you add 18 and 17 -you do get 35… which on a 30.00 fill, $10 is tax.

      Europe charges 6, 7, 8 dollars a gallon.

      Canada is 5-6.

      Americans hate tolls about 50-50 but they hate taxes 2-1.

      every year until last year the GOP in Va would kill the Dems by claiming the dems woul raise the gas tax – and it worked!

      McDonnell beat Creigh Deeds in part because Deeds asserted we need to increase the gas tax.

      but the US is not Europe.

      Europe taxes the heck out of gasoline but they don’t build more roads with it – they subsidize transit and rail roads.

      in this country is you could even talk people into increased taxes for fuel but all heck would break lose if you gave that tax to transit.

      people would go bat-crap crazy.

      finally – you higher you tax – the more people will get more efficient cars, start to carpool and there are indications – drive less.

      the Virginia GA will never increase gas taxes on that scale.

      Hell.. they just about blew their insides out by moving it from a fixed per gallon to a percent at the rack.. and the GOP has been called a traitor to their own party by the Tea Party types.

      I just don’t see it happening…but who knows? who would have thought it was the GOP that would raise the gas tax after decades of demonizing the Dems on the issue.

  4. JohnS Avatar

    The reason Arlington spends a million dollars on a bus stop (or apparently “only” 600k now) is because the pork-barrel federal grants doled out by the Obama administration to any project deemed “smart growth” or “transit-oriented” have completely obscured the true costs when it comes to building this infrastructure. This is happening all across the country with the most egregious case being High Speed Rail in California. It is a shameful system of wealth transfers by the federal government mixed with the political patronage objectives of the Obama administration. The President and his party are committed to emptying the US treasury to advance their social-engineering agenda, by all means necessary.

    Apologists for the federal transportation bureaucracy conveniently choose to ignore the corruption and waste inherent in the system of allocating federal spending for roads, transit and “bridges to nowhere”. Anyone remember The Big Dig?

    1. larryg Avatar

      oh you mean those grants that Bush did not “dole out”?

      those grants?

      None of that occurred under Bush?

      jeeze louise guy… I thought we were talking about transportation here.

      do Dems do pork different than GOP?

      1. JohnS Avatar

        I did mention road pork and “bridges to nowhere”.. Obama takes pork to a new level though under the auspices of “stimulus” and green energy

        1. larryg Avatar

          I thought Congress had to approve those things…no?

          1. A Congress controlled by the Democratic Party did so approve. Obama has not obtained any new stimulus legislation since his Party lost the House in 2010.

            But I do agree that both Parties are addicted to Pork, just different kinds and under different terms and conditions.

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