New Transportation Funding Bill: Going Nowhere FAST

CascadeNewLogoBy John A. Charles, Jr.

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.

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Posted by at 05:00 | Posted in Congress, Economy, Federal Budget, Federal Government, Taxes, Transportation | Tagged , , , | 14 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Bob Clark

    I believe much of the Federal Transportation agencies could be shuttered but there is still a rather significant interstate commerce aspect which probably would become balkanized if handled by state governments instead.

    Tolling seems like a preferable way to fund and maintain roads, and it is used sporadically in many other areas of the U.S. But it needs to be combined with independently non-profit agencies, or at least regulated if private as in utility/monopoly regulation; with these independent agencies governed by independently elected representatives (no appointments). Otherwise, the same politicians and structure as now will misspend the tolling monies and obfuscate in the handling of capacity additions.

    • MrBill

      Roads and highways under Federal jurisdiction (such as Interstates) should still be funded at the Federal level. What the Fed’s could do however, is allocate less to public transportation and more to roadways. Getting away from subsidizing light rail and other public transit systems would be a good move.

      • Eric Blair

        Presumably with an increasing population, which means more cars on the road, how do we deal with that without also a strongly supported mass transit system?

        • David from Mill City

          Eric– Increased cars on the road is not the
          real problem, that is cars parked at a work place. A parked car takes up more space then the typical office cubical.

        • MrBill

          You can still have mass transit. It just wouldn’t be subsidized.

          • Eric Blair

            And you think that would serve the poor?

          • MrBill

            Federal funding can pay for the roads we all drive on.

            The poor can choose whatever best works with their budget to travel those roads-same as everyone else. It could be a bus, taxi, friend, moped, scooter, Uber, bicycle, etc. Lots of choices out there.

            Subsidizing the cost of driving? Where can I sign up? Always eager to get free stuff.

          • Eric Blair

            The True Costs of Driving

            If we can subsidize people who drive a lot, why can’t we also subsidize mass transit? In fact, I would think that people who drive a lot would enjoy the benefit of having fewer people in cars on the road and taking up parking places.

          • MrBill

            i think we’re looking at the same thing from two different directions. I said roads are funded through a combination of user fees and taxes. Before I wrote this I looked up a page on AASHTO’s website. Like the Atlantic article, it said about half of funding comes from fuel taxes and user fees and the other half comes from a combination state, federal, and local property taxes plus a few other sources.

            But just because half comes from various taxes doesn’t mean we’re getting something for free. After all, who pays the taxes?

            I’d be fine with funding transportation infrastructure entirely through user fees and fuel taxes. I’d even be fine with toll roads. But I’d expect to see a corresponding reduction in other taxes that are currently funding the same thing.

          • Eric Blair

            Yet people who don’t use the roads as much or drive as much are helping subsidize those that do use it more. I don’t believe at any more I used the word free.

            If we can use tax money for the roads and driving, why can’t we also use it for mass transportation?

          • MrBill

            Tax money is used for mass transit today, but is it a good use of that money? In general I think the answer is no for two reasons. 1) because it tends to be very expensive (particulary light rail); and 2) because paying the operating costs is akin to having someone pay for your car and gas.

            Mass transit is fine. I just think it should be more self sufficient. Use gov’t funding for the roads, tracks, and whatever else we all run on and depend. Beyond that, people should be responsible for getting themselves from pt A to Point B.

          • Eric Blair

            If, as it appears, that driving is subsidized, and if the true cost of driving was passed on to those who use the roads, then mass transit might actually become a more viable option.

          • MrBill

            Most transportation funding comes from user fees and taxes for activity related to driving. So I don’t think transportation funding qualifies as a subsidy (if that’s what you’re implying).

            I have no problem with mass transit per se. If someone wants to start a bus company or build a light rail system, then go for it. But charge people for what it costs to operate the system and provide a little profit for the ones who built the system. The way it’s done now is comparable to having the gov’t cover part of my car payment, or buy my gas. I don’t think that’s a good way to do things, nor do I think that’s a good use of scarce gov’t funds.

          • Eric Blair

            Read the article I posted below. It addresses your issue of transportation funding. The fact is, drivers only pay somewhere around 50% of the cost of owning and driving a car. You would agree then, that the full cost of driving and owning a car should be put on the shoulders of the people who drive them?

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