If Congress does nothing, the cost of gasoline will drop 14 cents per gallon on Sept. 30. That not only would be a boon to consumers oppressed by hefty prices at the pump but also would go a long way toward ending one of Washington's favorite accounting gimmicks.
The public is supposed to think the 18.4 cents tossed to Uncle Sam for every gallon of unleaded (24.4 cents for diesel) goes to roads and bridges. Fifty-five years ago, it was true that the 3-cent-per-gallon levy went directly into the concrete and steel that gave us the Interstate Highway System. The authorization for most of the current tax expires next month, and Americans for Tax Reform President Grover Norquist fears President Obama will use jobs as an excuse to boost this tax. "His plan is going to be the highway bill," Mr. Norquist said in an editorial board meeting at The Washington Times. "Everyone wants highways, but you give them the money, they don't build highways. They build everything but highways."
Out of the $29 billion in fuel-tax revenue collected this year, the Congressional Budget Office estimated $7.6 billion would be diverted into mass-transit projects. That is only part of the problem. One look at the Federal Highway Administration's budget shows core spending priorities in the "highway" account frequently have nothing to do with highways. For example, the agency allocates $6.8 billion to a "livable communities" program designed to promote a leftist anything-but-the-automobile agenda. Another $8.9 billion will be blown on "environmental sustainability" schemes, and $2.5 billion will go to safety - that's the code word for paying local cops overtime to set up speed traps and East German-style roadblocks.
Mr. Norquist thinks it would be smarter to have the states, not the federal government, take care of their own road funding. "We have a federal gas tax, and money comes from Kansas to Washington, and then some of it goes back to Kansas," he said. "What goes back to Kansas comes back with Davis-Bacon attached to it, which raises the cost of building 25 percent." The Davis-Bacon law links federal mandates, including expensive union-sized wage requirements, to transportation projects. Sen. Tom Coburn, Oklahoma Republican, and Rep. Jeff Flake, Arizona Republican, introduced legislation that would allow state transportation departments to opt out of the federal gas tax so they can manage their own roads without the feds skimming off the top and adding strings.
Those pushing for an increase in the gas tax peddle the myth that fuel revenues are plunging because Americans are driving fuel-efficient and electric vehicles like the Nissan Leaf and Chevy Volt. This is a complete fabrication. Fuel-tax receipts dropped 4.5 percent from 2007 to 2010 because of the recession. During the same period, income-tax revenue dropped a whopping 23 percent. So there's no need to raise the gas tax or implement complicated per-mile taxing schemes. Get the federal bureaucracy out of the way and let the states maintain their own roads.
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