Earlier this month, Congress passed H.R. 22, a five-year transportation funding bill known as Fixing America’s Surface Transportation, or FAST.
Under the terms of FAST, the federal Highway Trust Fund will take in about $208 billion in federal gas taxes, while sending $280 billion back to the states by 2020. The $70 billion deficit will be made up from income taxes.
Essentially, this is the same thing Congress has been doing for decades. Since 1993 we’ve paid a federal gas tax of $18.4 cents/gallon; the money flows to Washington; then it gets sent back to the states after a chunk of it has been diverted into a wasteful transit account.
There is no policy rationale for this circular travel of dollars. Most auto, transit, and truck trips are local. Therefore, the operational money should be collected locally as well.
What Congress should have done is repeal the federal gas tax and shut down the federal transportation agencies.
The FAST Act was an expensive band-aid for a problem that needs a new approach. We have the technology to collect mileage-based user fees from motorists, truck operators, and transit customers. We should use that technology to pay for the roads and transit facilities that consumers are willing to pay for, and stop waiting to be saved by a federal transportation Santa Claus.
John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.