DC Velocity - February 2014

THE HIGHWAY FUNDING DANCE IS ABOUT TO BEGIN AGAIN. The law that funds highway spending expires at the end of the current federal fiscal year on Sept. 30, and that means the battle over what to fund and how to fund it begins again.

Don’t expect to see consensus anytime soon on such matters. About the only thing Congress has been able to agree on in regard to highway spending in recent years is less-than-clever acronyms—SAFETEA, SAFETEA-LU, and the current law, MAP- 21. For those who are curious, that’s the Moving Ahead for Progress in the 21st Century Act.

The first proposal aimed at renewing and expanding federal funding
for surface transportation spending was filed late last year by Rep. Earl
He proposes a phased-in 15-cent-per-gallon increase
in the tax on gasoline and diesel, plus linking the tax
to inflation. Longer term, he proposes replacing the
fuel tax with some other form of funding—perhaps
mileage-based user fees.

The problem with current formulas, as most any observer knows, is that even if every penny of the Highway Trust Fund were spent on credible highway and other transportation projects each year, the funds collected for the fund simply have not been able to keep up with the need for a number of reasons. Principal among those are two related issues.

First, Congress last increased fuel taxes in 1993. Inflation, even though relatively mild in recent years, has driven costs up markedly since then. Second, the development of ever-more-efficient vehicles means that drivers spend less on fuel for every mile driven—without reducing wear and tear on the roads.

There’s a pretty strong consensus that failure to modernize our highway infrastructure places a huge burden on the economy. You’ve only had to lose time in a traffic jam to know that. Failure to maintain the highways, bridges, ports, and airports impairs our productivity—and productivity has been a principal factor in the nation’s competitiveness for a very long time.

I don’t have much hope that Congress in an election year can work this out beyond, perhaps, some sort of short-term extension of the current law. It almost makes you miss the era of earmarks, when Congress could agree to a highway spending bill as long as key players got their new bridges to nowhere.

bigpicture

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