Expert Comment: Gas Tax Increase Won’t Fix Mobility Crisis

Published January 16, 2008

(Chicago Illinois – January 16, 2007) On Tuesday, January 15, the National Surface Transportation Policy and Revenue Study Commission released a report recommending federal gasoline taxes be increased 40 cents a gallon over the next five years.

Other recommendations include expanding state and local public transit systems and highway capacity, smoothing traffic flow, encouraging alternative commute options such as carpooling and public transit, and promoting energy-efficient construction and lighting in transit systems.

Experts contacted by The Heartland Institute offered the following comments about the recommendations. You may quote from this statement or contact the experts directly at the phone numbers and email addresses provided below.

“The commission’s estimates are predicated on the assumption that the federal government should continue funding 40 percent of the total national cost of surface transportation infrastructure. That would leave the other 60 percent of the cost to be funded by the states and localities.

“Many observers question whether state and local governments could collectively come up with their share of the funds — requiring an average increase of 37.5 to 60 cents a gallon or its equivalent over the next five years. Indeed, evidence points in the opposite direction.

“Most states lack the political will to raise taxes for transportation — whether it be fuel, property, or sales taxes. Texas, Minnesota, Washington State, and Iowa are only the latest jurisdictions to have decided against tax increases to fund highway programs.”

C. Kenneth Orski
Innovation Briefs
[email protected]

“There is no shortage of funds for highways. The problem is that too great a share of federal highway user fees — 40 percent — are already being diverted to transit and other non-highway activities. Even the money that is dedicated to highways is often earmarked for bridges to nowhere and other projects aimed more at satisfying the egos of members of Congress than at improving transportation.

“Over the past 15 years alone, America has spent well over $100 billion on rail transit construction projects. What do we have for it? Transit has grown by 20 percent while urban driving has grown by 50 percent. Every single dollar spent on rail transit construction is a dollar wasted, which is why raising gas taxes is the wrong solution to our mobility crisis.”

Randal O’Toole
Senior Fellow
Urban Growth and Transportation
Cato Institute
[email protected]

“The commission’s vice chairman justified the massive new gas tax by saying ‘there is no free lunch.’ Yet that is exactly what this proposal is. Much of the 40 cent rise in gas taxes would be diverted to rail lines and transit systems that are already heavily subsidized by automobile drivers.

“If the commission truly believes in its stated goal of improving roads, then it should spend gas tax money on the roads that are being used by the people paying the tax. So long as gas tax money is being diverted to subsidize rail systems, the commission’s proposal is little more than a pork barrel project that pays mere lip service to maintaining public roads and bridges.”

James M. Taylor
Senior Fellow
Environment Policy
The Heartland Institute
[email protected]

“A large increase in the gas tax without fundamental reform in how and where the transportation money is spent would be a step in the wrong direction. This country definitely needs to spend more on transportation infrastructure, but we should not be giving a spendthrift Congress billions more to fritter away on bridges to nowhere. We need to target investments to relieving congestion in our major urban areas and expanding capacity for goods-movement on major Interstate routes.”

Robert Poole
Director of Transportation Studies
Reason Foundation
[email protected]

“Many people point to the bridge collapse in Minnesota last August as proof we need to spend more on basic infrastructure such as roads and bridges, and they are right. But they are wrong to recommend raising taxes to do it. Last year Minnesota lawmakers approved giving $200 million to Mall of America. The governor vetoed that giveaway, but one year earlier, with the governor’s okay, Minnesota lawmakers pledged more than $500 million to the Minnesota Twins baseball team for stadium construction. That money could be going to maintain roads and bridges. Lousy spending priorities by government officials won’t be solved by raising taxes.”

Steve Stanek
Research Fellow
The Heartland Institute
[email protected]

For more information about The Heartland Institute, please contact Harriette Johnson, media relations manager, at [email protected] or 312/377-4000.