If you set aside $50,000 dollars for your child’s college education, would you want to be forced to give a large portion of that money to pay for the college costs of someone else’s child? If you bought a new car, would you want to have to let your roommate—who didn’t buy one—use it every other day at your expense? Of course not.
Yet these scenarios are similar to details of the proposal unveiled today by President Obama for the next federal highway bill: take per-gallon federal gas tax money paid by the motorists, truckers, and bus operators that use the nation’s highway and bridges, and spend it on other modes of transportation—such as passenger rail and urban subways and bus systems—which do not benefit those motorists paying the tax.
Adopting a “unified” or mode-neutral highway bill is dangerous. It would punish the motorists paying the federal gas tax that largely funds the Highway Trust Fund (HTF) that pay for the Federal Highway Program. It would also open the door even further for special interests to lobby Congress and Washington bureaucrats to spend gas tax money on the modes of transportation and non-transportation activities they want—at the expense of highways and bridge maintenance and construction that motorists expect to be paid for with gas tax money.
Obama’s proposal also has a massive price tag: $302 billion dollars for a four-year bill, or $75.5 billion a year. That is a 38 percent increase from how much gets spent out of the HTF now. There certainly are current and future transportation infrastructure projects the states want funded, but having the federal government make most of the funding and project decisions is the wrong solution.
There is no shortage of private companies willing to partner with states to invest in capital-intensive (expensive) transportation projects that are credit-worthy. Recent examples include the $1.9 billion HOT lanes project in Northern Virginia and the $1.6 billion I-595 reconstruction and managed lanes project in Florida. Further, at least 20 states have or are considering new ways to pay for transportation projects, including state gas tax increases and bond-backed measures.
Funneling more money through Washington’s maze of programs and regulations, which are too often influenced by special interests rather than actual transportation problems on the ground, wouldn’t help the states. Instead, it would politicize their transportation decisions and result in government picking winners and losers. One possible winner is Amtrak. The CEO of Amtrak recently remarked that “we [Amtrak] will rank well,” under a mode-neutral funding plan and supports the idea. No kidding.
Equally, Obama’s plan to use an alleged “one-time transition revenue from pro-growth business tax reform” to help pay for the bill should cause heartburn for federal gas tax paying-motorists and taxpayers alike. Revenue from business tax reform should go toward lowering rates, not to pay for new spending elsewhere.
Obama’s plan is full of flaws, and it would not accomplish what the states could do without Washington’s one-size-fits-all system: cost-effectively reduce congestion and improve mobility for commuters and businesses.
This post has been modified.