Paying for Highways

By Nathan Barton

The Tax Foundation just released a study on how states pay for highways, and you can read it here.

The National Center for Policy Analysis (NCPA) (in their daily e-zine) released a summary, which has some telling numbers: Only Half of State Road Spending Is Covered by Gas Taxes and User Fees

Most funding should come from user fees (such as tolls) and user taxes (such as a gasoline or vehicle license tax), so as to ensure that those who are using the roads are bearing the largest part of the cost. If funding is taken out of general revenue funds the roads appear to be free, which can lead to overuse or congestion.

I am showing their numbers as a table, and calculated out the rest:

2011 State/Local Transportation Spending

Highway user fees and taxes                                  $153.0 billion spent

State/local:     User fees and tolles                      12.7

Fuel taxes                                                                41.2

License fees                                                             23.2

Total state/local                                                     77.1 (50.4%)

Federal  Aid (mostly fuel excise tax)                 46.0 (30.1%)

General state/local revenue (general fund)     29.9 (19.5%)

Nathan: The article goes on to explain: Delaware, Hawaii, Florida and California raise at least two-thirds of their transportation spending from user fees and taxes, while in Alaska, South Dakota, Wyoming and Louisiana, most spending comes from general revenue funds.

The Federal Highway User Trust Fund (called by various names in various states) was created about 95 years ago, and originally provided federal assistance for primary and secondary roads to states, which usually passed much of that down to counties and municipalities.  In fact, virtually ALL roads in the nation are designated as “Federally Assisted Primary” (FAP), Federally Assisted Secondary (FAS), and Federally-Assisted Interstate (FAI) highways, the FAI designation coming along in the 1950s.  Originally this assistance was 10% of the cost of building and improving roads (for FAI it was, as I recall, either 20 or 25%).

Of course, this was intended to spread out the cost of roads and to balance the fact that someone buys fuel in Kansas but drives on I-70 in Missouri, and fills up again in Illinois.  And because it was politicians robbing Peter and paying both Paul and Peter with stolen money.  Oh, and it was also used by Congress to do a little bit of “social engineering” along the way.  Actually quite a bit: like destroy the privately-owned passenger railway system that once served this country, in part because the “big railroad tycoons” didn’t pony up as much campaign contributions as the auto industry and the heavy construction industry.  And in part because the highways, unlike the railroads, were PUBLICLY owned and not privately owned.  (There WERE a few privately-owned roads: all long since bought by governments.)

You notice that in 2011, the Feds pay a whooping 30%, not the 10% or 20% of days of yore.  And as always, that money has strings – cables, in fact – attached.

And THAT, of course, is the problem.  Federal and state fuel taxes (and don’t get me started on local taxes) and all the license fees and tolls and such are NO LONGER “user fees” because over the decades, LARGE percentages of this money, which is supposed to build and maintain highways for truck and car traffic, has been diverted over the decades to pay for government boondoggles, starting with Lady Bird Johnson’s highway beautification (litter control was just one part of it) and continuing to fund “alternative transportation.”  So this $153 billion in 2011 was split into a LOT of slices.  Subsidizing bus lines (especially inside cities) and handicapped on-call taxis and bike paths and hiking trails and overpasses/underpasses to serve as chokepoints (sometimes literally) for kids walking to government-ruined, theft-funded schools and light rail and more.  And worse: “public art” – things that sometimes look like what tow-trucks pull OFF the highways after a bad accident, and more.  And “safety campaigns” like seat-belt and helmet and anti-drinking campaigns.  And travel promotion campaigns (admittedly, to get people to drive more, at least in the past, and therefore buy more fuel).  And law enforcement agencies who have long rejected their origins as “courtesy patrols” to help travelers, and grandiose rest areas and “travel information centers.”  And of course, MASSIVE bureaucracies to shuffle paper back and forth, and meet all the hyperactive demands of the fedgov for red tape.  All of these little welfare schemes were added, leech-like, to the basic “build and maintain roads” scheme.

In other words, like virtually ALL government programs, it lost its way and became corrupt.

So the Tax Foundation’s recommendations are good, but not necessarily right.  The FIRST thing to do is get the spending under control.  And part of that is naturally, getting the FedGov OUT of the road business, except for those things that are actually authorized in the Constitution (which amounts to ZERO spending, near as I can figure).  Then states can fix their funding systems – and the best way to do that is to commercialize (not “privatize”) the road network, so that the money isn’t frittered away on things that have nothing to do with Truck X and Car Y going from point A to point B.

Then, we’d have one less political football, and one less reason to grow government in DC and the Fifty States.

Mama’s Note: Unfortunately, that can’t happen until the same thing is done for all government programs, spending and theft. Pandora isn’t going back into the box easily or willingly.

About TPOL Nathan

Follower of Christ Jesus (a christian), Pahasapan (resident of the Black Hills), Westerner, Lover of Liberty, Free-Market Anarchist, Engineer, Army Officer, Husband, Father, Historian, Writer, Evangelist. Successor to Lady Susan (Mama Liberty) at TPOL.
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