Senators Chris Murphy (D–CT) and Bob Corker (R–TN) have proposed hiking federal fuels taxes by 12 cents per gallon. Car and truck drivers and bus operators would pay a gas tax of 30.4 cents a gallon and a diesel tax of 36.4 cents a gallon—up from 18.4 cents and 24.4 cents, respectively. That is on top of state fuel taxes and fees. But what would they get in return?
Short-changed. Fleeced. Ripped off.
There are plenty of words that describe the fact that billions of gas tax dollars deposited into the Highway Trust Fund (HTF) are skimmed off the top each year and diverted away from road and bridge improvement projects that would reduce traffic congestion and benefit the motorists paying the taxes.
Where does the money go? To any number of spending diversions that Congress has deemed eligible for these highway user fees: subway systems in New York and Philadelphia, ferry boats, bicycle and walking paths, metropolitan planning organizations, sidewalks, and urban landscaping. These activities may have value in some local communities, but they are not federal priorities and should not consume federal gas taxes—especially at the expense of the motorists paying the fuel taxes.
Motorists can reasonably assume that these diversions would continue under the Murphy–Corker tax hike plan.
Hyperbolic rhetoric tossed around these days about “crumbling roads and bridges” and a pending cash shortfall in the HTF leads to calls for more federal spending that miss an insidious problem with the trust fund: spending on non-federal, non-transportation programs.
In short, as much as 25 percent of HTF spending has morphed into a federal slush fund for myriad special interests that think they deserve their fair share.
Americans for Tax Reform put it best in its response to the Murphy–Corker plan:
[T]he problem with the highway trust fund and the present gas tax is that the Davis-Bacon Act drives up the cost of construction by 25 percent or more and much of the gas tax money paid by drivers of cars and trucks is siphoned off to pay for mass transit. The highway trust fund does not have an under-taxing problem. It has an overspending problem. There is no good reason to raise the gas tax.
Washington’s role in infrastructure spending is grossly overstated, considering the huge private investment in infrastructure ranging from freight rail to pipelines to cell towers—and considering that states have their own transportation funding sources and are actively finding new ways to pay for the transportation they want amid federal inaction.
Murphy, Corker, and their colleagues would do better by the motorists and truckers they’re asking to fork over more money if instead they called for cutting parochial spending out of the trust fund and giving the states, localities, and private sector more flexibility and control over transportation decisions. They know the priorities on the ground better than Washington does.