With Highway Trust Fund Running on Fumes, Transportation Proposals Emerge

May 14, 2014

By Akash Chougule

Throughout the past several weeks, the urgency to adopt a new transportation bill has grown exponentially. It is estimated that the Highway Trust Fund (HTF) will run dry toward the end of this summer, with the broader multi-year law that funds federal surface transportation programs  expiring at the end of September. Support for improving transportation infrastructure is bipartisan, with millions of Republican, Democrat and Independent motorists equally fed up with roads littered with potholes and crumbling bridges. Unfortunately, the propensity for Washington politicians to waste precious transportation dollars on irresponsible expenditures that have nothing to do with repairing our roads is also bipartisan, leaving the American people high and dry – on the hook for wasteful spending, and stuck in traffic.

Recently, the White House, the House of Representatives Appropriations committee, and the Senate Environment and Public Works committee all released their own transportation proposals. Unfortunately, all three largely leave in place the systemic problems that have resulted in the unsustainability of transportation funding. Since 2008, HTF has been bailed out $54 billion.

The White House’s “GROW AMERICA Act” is a four-year, $302 billion bill that increases funding by 37 percent. The $199 billion for highways and roads is a 22% increase – but the $72 billion for transit and “expanded options” is a 70% increase. This outrageous jump is a blatant example of the White House’s misguided priorities. Rather than increasing focus on improving the most widely used transportation infrastructure –roads – the Administration wants to use funds meant for roads to invest in little-used transit and advance their environmental agenda in the process.

The proposal also includes $87 billion to “shore up” HTF and $19 billion for rail (including massive investments for Amtrak, the poster-child of government inefficiency). The White House wants to pay for their bill through increased taxes on businesses, or allowing states more flexibility to toll drivers. Of course, eliminating wasteful and misguided spending could eliminate the need for increased revenue.

Meanwhile, the Senate EPW bill is a six-year reauthorization of the current transportation bill, maintaining current spending levels plus inflation. Like the White House proposal, the Senate bill fails to eliminate wasteful spending on projects that are inherently local and represent a misuse of funds meant to improve roads and bridges. The current formula is obviously unsustainable, and the Senate EPW proposal does nothing to change the direction that has left HTF constantly needing enormous bailouts from the general fund.

The House Appropriations Transportation, Housing, and Urban Development (THUD) proposal is the only one of the three that contains some promising reforms. It includes over $40 billion for the federal highway program, but makes important spending cuts to misguided expenditures. For example, no funding is provided for high-speed rail. There are cuts and efficiency improvements for Amtrak, and cuts to TIGER grants, as well as a provision that prevent the grants from being used on non-essential purposes.  Still, even this plan has shortcomings that could be improved in order to repair and secure transportation funding and the quality of American infrastructure for the future.

The general principles that would improve transportation infrastructure funding in the United States are not complex. The federal government needs to refocus its priorities and return more decision rights to the states, where they belong. Gas tax revenue, dollars that are collected as a user fee and intended to fund road repair and maintenance, should actually be spent entirely on road repair and maintenance. Federal dollars should not be spent on inherently local projects, or on projects that have nothing to do with improving the urgent needs of transportation infrastructure. It is not fair to make taxpayers in Kansas fund the New York City subway. Nor is it right that New Hampshire families are paying for covered bridges in South Carolina.

Once again, too much federal government intrusion has created a problem that politicians are attempting to solve with even more federal government intrusion, when in reality, federalist policies and free-market reforms are the right answer to saving taxpayer dollars and creating happy travelers.

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