Summer driving season is soon to kick into high gear, and many Americans are starting to think about that upcoming family road trip to the beach. Lost among all the planning and packing is a looming problem that’s probably not on their minds: how the government funds the construction and maintenance of the roads bringing eager families to vacation fun.
For over 100 years, consumers filling up at gas stations have filled up state and federal government highway funds through the use of excise taxes; consumption taxes, which are included in the price of goods; and motor-fuel taxes.
Technological advancements and changing consumer habits are straining government infrastructure budgets and prompting lawmakers to increase tax rates to keep up with the times. However, before lawmakers think about hiking taxes, they need to rethink how the money from those taxes is spent as a first waypoint on the path to road-funding success.
As less gasoline is needed to propel U.S. automobiles farther, state and federal gas tax revenues inevitably fall. Because of monetary inflation and costly government regulations, such as state prevailing-wage laws and the federal Davis Bacon Act of 1931, the cost of building and maintaining government roads continues to increase, and many states are worrying about infrastructure funds running on “empty.”
According to the U.S. Environmental Protection Agency, the average efficiency of cars and trucks on American roads has improved dramatically At the same time, drivers’ estimated carbon-dioxide output — a byproduct of the internal-combustion process — has declined.
Evidence of this trend of driving more but buying less gasoline is also supported by data from the U.S. Federal Highway Administration. In March 2017, the latest month for which data is available, Americans drove about 4.4 percent more miles than they did in January 2010. Compared to January 2000, Americans drove 16.3 percent more.
Fixing the broken transportation system means fixing the broken process through which the government funds and spends transportation money. Instead of rushing to raise the gasoline tax, states should first make sure funds are actually being spent on transportation infrastructure.
For example, in New York, a 2014 government report discovered only 22 percent of the state’s “Dedicated Highway and Bridge Trust Fund” was actually “dedicated” to highways and bridges. Instead of filling in potholes, the report said, 88 percent of New York’s gas-tax revenue was used for “state operations” and “debt service,” things intended to be funded through general revenue.
At the federal level, up to 25 percent of taxpayer funds collected from excise taxes on fuel purchases and stored in the federal Highway Trust Fund is used for purposes other than building highways and bridges.
Ensuring highway funds are actually used for highways would be equivalent to a 25 percent boost in funding, and it could be done without raising taxes on consumers by a single cent.
Instead of hiking taxes to compensate for the benefits provided by technological innovation, lawmakers should explore better options for funding public infrastructure. They can start by using money meant for roads on road-related projects.
[Originally Published at the Hill]