By JOHN HOOD Posted Monday, March 24, 2008 4:30 PM PT
For thoughtful fiscal conservatives, taxing motor fuels and vehicles to pay for the roads they traverse is among the least-objectionable forms of taxation in American government.
These taxes solved our transportation system's main pricing problem — that most of our highways and streets have, as a practical matter, had to offer unlimited access and thus couldn't be tolled — by essentially tethering how much drivers pay to how much they drive.
On second thought, fiscal conservatives should still oppose any increase in the federal gas tax. Here's why:
There's nothing magical about "federal" funding of local roads. The money doesn't come flying in from some Neverland.
Instead, the system simply compels motorists to send gobs of money to Washington every time they fill up their tanks.
Round-Tripping Taxes
The politicians in Washington then swipe one-quarter of this gas-tax money for non-highway purposes, such as building underutilized transit lines and financing the federal budget deficit.
The remainder is returned to the states, but not in ways helpful to most American drivers.
For one thing, federal highway dollars don't flow back to states in proportion to how much they pay in.
Many populous states with major transportation challenges — such as Texas, Florida, Michigan and my home state of North Carolina — have over the years been net losers.
They'd certainly be better off if Washington stopped "helping" them.
Even if the outflow were more equitable, most states would end up on the losing end of the deal.
You see, federal highway dollars come with strings attached. They force states to pay prevailing union-scale wages, for instance, jacking up the cost of highway construction in many jurisdictions.
And they are increasingly earmarked for projects that members of Congress like but that don't really reflect statewide transportation priorities.
Transportation Pork Fest
According to the Tax Foundation, recent federal highway bills have funded the likes of an $8 million parking garage in Harlem, a $3 million film about Alaska's road system, a $2 million visitors center in rural Louisiana and $4 million in grants to automotive museums.
If too many cooks tend to spoil the broth, it could be said that too many politicians handling federal gas taxes tend to thin the broth so much that motorists can hardly taste anything worthwhile.
Another reason to question yet another increase in the federal motor-fuels tax is that technological changes are weakening its usefulness as a tool for transportation finance.
As the fuel efficiency of motor vehicles increases, motorists contribute less revenue for every mile they drive.
The advent of alternative fuels also will unravel the old tether between gas consumption and miles traveled.
Rather than again ratchet up a tax that is rapidly becoming outdated, policymakers ought to change how American transportation is provided and funded.
The first step is to move the surface-transportation function out of Washington and back to the states where it belongs.
Congress should authorize states to use new electronic-tolling technologies to fund the maintenance and expansion of all limited-access highways, no matter how these critical arteries were originally financed.
States, in turn, should look at emerging technologies for charging drivers directly according to miles traveled even on unlimited-access roads, using sensors and satellites — as long as state agencies safeguard the privacy of the motoring public.
States and localities should welcome private investment in new road capacity and consider selling existing toll ways to private firms, as jurisdictions such as Chicago and Indiana have recently done.
American transportation does need a new wave of capital investment.
Many communities are choking in traffic or experiencing costly and dangerous conditions due to inadequate maintenance.
But raising the federal gas tax is the wrong solution to the right problem.
John Hood is president of the John Locke Foundation (johnlocke.org), a nonpartisan, nonprofit public policy think-tank in Raleigh, N.C.
For thoughtful fiscal conservatives, taxing motor fuels and vehicles to pay for the roads they traverse is among the least-objectionable forms of taxation in American government.
These taxes solved our transportation system's main pricing problem — that most of our highways and streets have, as a practical matter, had to offer unlimited access and thus couldn't be tolled — by essentially tethering how much drivers pay to how much they drive.
On second thought, fiscal conservatives should still oppose any increase in the federal gas tax. Here's why:
There's nothing magical about "federal" funding of local roads. The money doesn't come flying in from some Neverland.
Instead, the system simply compels motorists to send gobs of money to Washington every time they fill up their tanks.
Round-Tripping Taxes
The politicians in Washington then swipe one-quarter of this gas-tax money for non-highway purposes, such as building underutilized transit lines and financing the federal budget deficit.
The remainder is returned to the states, but not in ways helpful to most American drivers.
For one thing, federal highway dollars don't flow back to states in proportion to how much they pay in.
Many populous states with major transportation challenges — such as Texas, Florida, Michigan and my home state of North Carolina — have over the years been net losers.
They'd certainly be better off if Washington stopped "helping" them.
Even if the outflow were more equitable, most states would end up on the losing end of the deal.
You see, federal highway dollars come with strings attached. They force states to pay prevailing union-scale wages, for instance, jacking up the cost of highway construction in many jurisdictions.
And they are increasingly earmarked for projects that members of Congress like but that don't really reflect statewide transportation priorities.
Transportation Pork Fest
According to the Tax Foundation, recent federal highway bills have funded the likes of an $8 million parking garage in Harlem, a $3 million film about Alaska's road system, a $2 million visitors center in rural Louisiana and $4 million in grants to automotive museums.
If too many cooks tend to spoil the broth, it could be said that too many politicians handling federal gas taxes tend to thin the broth so much that motorists can hardly taste anything worthwhile.
Another reason to question yet another increase in the federal motor-fuels tax is that technological changes are weakening its usefulness as a tool for transportation finance.
As the fuel efficiency of motor vehicles increases, motorists contribute less revenue for every mile they drive.
The advent of alternative fuels also will unravel the old tether between gas consumption and miles traveled.
Rather than again ratchet up a tax that is rapidly becoming outdated, policymakers ought to change how American transportation is provided and funded.
The first step is to move the surface-transportation function out of Washington and back to the states where it belongs.
Congress should authorize states to use new electronic-tolling technologies to fund the maintenance and expansion of all limited-access highways, no matter how these critical arteries were originally financed.
States, in turn, should look at emerging technologies for charging drivers directly according to miles traveled even on unlimited-access roads, using sensors and satellites — as long as state agencies safeguard the privacy of the motoring public.
States and localities should welcome private investment in new road capacity and consider selling existing toll ways to private firms, as jurisdictions such as Chicago and Indiana have recently done.
American transportation does need a new wave of capital investment.
Many communities are choking in traffic or experiencing costly and dangerous conditions due to inadequate maintenance.
But raising the federal gas tax is the wrong solution to the right problem.
John Hood is president of the John Locke Foundation (johnlocke.org), a nonpartisan, nonprofit public policy think-tank in Raleigh, N.C.
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