It’s summertime, and that means millions of Americans cramming in their minivans and crisscrossing around the country on family vacation. But how safe are the roads, and will they be backed up for miles of gridlock?
This year the highway trust fund that finances our national highway system is running out of money. The federal gas tax will raise about $34 billion this year, but that isn’t enough revenue to cover all the spending Congress wants to do. So naturally, the lobbyists in Washington — including mayors, road builders, transit operators and civil engineers — are demanding a higher gas tax as the only way to fix potholes and keep traffic flowing. I call this crowd the gas-tax guzzlers.
Last week, I testified before the Senate Committee on Finance on whether we need a federal gasoline tax hike. I argued “no” and explained to members of the committee that the so-called highway funding shortfall is a hoax. The federal gas tax of 18.3 cents a gallon raises plenty of money to finance the upkeep of the interstate highway system.
What it shouldn’t finance are projects that have nothing to do with roads. Overall, more than 20 percent of federal gas tax dollars underwrites non-highway projects like mass transit, bike paths, high-speed rail, and bus lines. Think about the billions of federal dollars that are helping finance California’s $68 billion high-speed rail project to nowhere.
This year alone, roughly $8 billion of highway trust fund money will be raided and used for mass transit projects. Funding rail and buses with the gas tax violates the principle that those who use the infrastructure should pay for it.
Critics of this plan say that motorists should fund transit projects because this reduces road congestion. In reality, so few Americans take transit to work today, (only about 5 percent of commuters ride transit) that except in a few large cities, transit has a minimal impact on traffic gridlock. And building another lane of highway in a city like Seattle or Washington, D.C. would speed the flow of traffic at one-tenth the cost of expensive and glitzy rail systems.
Then there is the federal Davis Bacon Act that requires effectively a “prevailing wage” be spent on all federal road projects. This adds as much as 20 percent to the cost or building a road. We could get a free bridge for every four we build, if we could repeal this give-away to the unions.
So, if Congress would implement these two measures alone they could fully fund the interstate roads America needs.
Moreover, a gas tax hike will hurt the finances of the middle class. The best rule of thumb is that every penny rise in gas prices at the pump takes about $1.5 billion out of the wallets of motorists. So a 10- or 20-cent gas tax will take about $15 to $30 billion from consumers. That’s a massive negative stimulus to the economy at a time of stagnant wages for a decade in America. In Michigan this year, 80 percent of voters rejected a ballot initiative to raise gas taxes to pay for roads.
Proponents of higher gas taxes point to the fact that the federal gas tax hasn’t been raised since 1993 and hasn’t kept pace with inflation. That’s true, but the federal funding peaked when the 42,000-mile national interstate highway system was just being completed. So the feds need less money now than 30 years ago. No one argues that we should be spending today what we did in the 1960s on the Apollo moon landing mission.
Nor has the highway system been underfinanced. Nationwide, from 1984 to 2012, the capital spending increase for roads and bridges has been nearly triple the inflation rate during this period (330 percent versus 121 percent). If the infrastructure is crumbling and bridges are falling down, it’s not because of too little money spent.
What is true is that America needs more roads because congestion is getting worse over time and this is a clear economic drain on the United States. By some estimates the average American worker must work the equivalent of an extra week a year (37 hours stuck in traffic congestion) due to crowded roads and highways. But that problem can also be solved through smart tolling and other market incentives to properly price use of the infrastructure during peak commuter hours to reduce overcrowding.
We should also be building more private roads paid for by modern tolling and use Uber-type technologies to adjust prices during peak hour commuting times to reduce congestion.
One last point. Nearly every Democrat on the Finance Committee who moaned about the infrastructure crisis in America voted against the Keystone XL pipeline this year.
This is a project that could create well more than 10,000 jobs, that would increase American energy exports, and would increase U.S. national security — and would not cost taxpayers a dime. We ought to build the cheap and easy infrastructure projects first.
That Congress refuses to do this suggests that this debate about raising the gas tax isn’t really about getting better roads; it is about gouging consumers in Washington with yet another tax hike.
• Stephen Moore is a senior fellow at the Heritage Foundation.