Taxes, Transportation

A chance to devolve transportation money and authority back to the states

For decades, U.S. transportation policy has been stagnant. Because about half of gasoline taxes cycle through Washington, D.C., cost-sharing and benefits in transportation are distorted. A new bill offers a chance to restore the balance.

The Transportation Empowerment Act, introduced by U.S. Sen. Mike Lee, R-Utah, and Rep. Tom Graves, R-Ga., gradually would lower the federal gas tax from the current 18.4 cents to 3.7 cents per gallon over five years. The legislation also would lift federal restrictions on state departments of transportation.

icon_op_edThe most recent U.S. Government Accountability Office study of gas tax redistribution among states shows that nearly 5 cents of the federal 18.4 cents per gallon tax paid by Colorado motorists ends up in other states. Keeping Colorado money in Colorado would mean the equivalent of a 5-cent gas tax increase, or nearly $100 million per year in new transportation funding.

Not only would devolving the federal gas tax to the states result in a major boon to Colorado roads and bridges, it also would honor a promise made to the American people more than 50 years ago. In 1956, Congress passed the National Defense Highway Act to construct the Interstate Highway system. The temporary federal gas tax was promised to expire when construction was completed.

For all practical purposes, interstate highway construction was finished in 1982. Unfortunately, taxes almost never go away, or get smaller. Nor do government agencies or programs. Coincidentally, 1982 marks the same year roads outside the interstate system became eligible for federal funding. By tripling eligible mileage, the U.S. Department of Transportation used road revenues to fund other things more aggressively. Increasing amounts of gas tax revenue were siphoned to fund non-road programs, and congressional earmarks mushroomed. U.S. Sen. Tom Coburn’s book “Breach of Trust” documents a common practice. Each member of Congress is rewarded with a $15 million earmark for a chosen project in exchange for his vote to continue the federal gas tax.

Since 2008, federal gas tax revenues have not kept pace with vehicle miles driven and fuel efficiency gains. Rather than diminish the spending, though, Congress has backfilled the funding of transportation with revenue from the general fund. The irresponsible tactic of accelerating the national debt to fund transportation pork has helped to silence the states on the question as to which states are being enriched at the expense of others.

Congress has created the perception that all states are enriched by federal largesse, while it uses the money to keep control over any state that might stray into finding innovative solutions.

It is worth noting that the federal government does not own or operate any transportation infrastructure (other than roads in national parks, etc.). Normal roads, highways, streets, airports and transit stations are owned by states, counties, cities or districts, making the cycling of funds through Washington questionable.

The title of the 1956 legislation (National Defense Highway Act) was not a typo. Not only were the roads built in part for national defense purposes, but the title also allowed Congress to sidestep the constitutional prohibition on federal spending for local transportation.

The controversy over federal involvement in transportation arose in the Early Republic. President Jefferson informed Congress on December 2, 1806, that he might support a constitutional amendment to allow federal involvement, but that without an amendment, the federal government had no authority over road-building. At least eight presidents, including Madison, issued no less than 19 vetoes of transportation bills as “unconstitutional.” Monroe’s only veto was of a transportation bill, but he issued two veto messages in an effort to help Congress understand.

If the Transportation Empowerment Act were to pass, most states probably would raise state gas taxes by an amount equal to the federal decrease. Revenue neutrality would yield a significant funding boost to transportation, particularly for states such as Colorado. The net revenue for gas tax money that is raised in the states returning to the states is less than 70 percent. But even that figure does not account for funding delays and the attached strings, or for redistribution from one state to another.

Citizens who favor more highway funding dollars staying in Colorado should take a close look at the Lee-Graves proposal.

Dennis Polhill is senior fellow in public infrastructure at the Independence Institute, a free market think thank in Denver.  This op-ed originally appeared in the Denver Post.


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