Summer is the peak season for both traveling and new construction, so itâ€™s just about the worst imaginable time for the countryâ€™s transportation funding to be on the verge of running out.Â On Tuesday, Transportation Secretary Anthony FoxxÂ sent lettersÂ to the heads of all 50 state transportation agencies, telling them that the federal Highway Trust Fund would start to dry up by early August, leaving states on the hook for most of their transportation costs. The Highway Trust Fund provides anywhere from 30-70% of transit money to states, and Foxx hasÂ estimatedÂ that the average state will lose 28 percent of its federal funding. President Obama, giving a speech under the Key Bridge in Washington, D.C.,Â plugged his ownÂ $302-billion plan to replenish the trust fund by closing corporate tax loopholes.
The culprit, saysÂ Jared Bernstein, is the federal gas tax. At 18.4 cents per gallon, the gas tax provides a majority of the Trust Fundâ€™s revenue, but it hasnâ€™t been raised since 1993. Over the last 21 years, a number of factors have converged â€”Â the gas tax has not been indexed to inflation, the total number of vehicle miles driven in the U.S. has actually declined, cars are more fuel-efficient than ever â€”Â to reduce the purchasing power of gas tax revenues by 28%.
Tracy Hadden LohÂ at Greater Greater Washington says that thereâ€™s a simple, obvious solution for the short term: Raise the gas tax. She writes, â€śthe CBO estimates that raising the two motor fuel taxes by 10Â˘ would solve the problem without eliminating funding for any current transportation programs â€¦ Other issues are marginal compared to the effectiveness of simply adjusting motor fuel taxes for inflation.â€ťÂ Danny VinikÂ goes further: Not only should we raise the gas tax right away, we should index it to inflation so that we donâ€™t find ourselves in a similar broke position a few years from now. Of course, Vinik says, this would be political suicide for President Barack Obama, who promised not to raise middle-class taxes. Thatâ€™s why you shouldnâ€™t make overbroad promises, especially when thereâ€™s already aÂ bipartisan proposalÂ in Congress to raise the gas tax, he writes.
Others, on both the right and the left, are already starting to look beyond the gas tax.Emily Badger, talking to Representative Earl Blumenauer (D-Oregon), notes that because Americans are driving less and doing so with more efficient fuel, the gas tax no longer serves its original purpose as a user fee. Instead, she proposes the idea of a â€śvehicle miles traveledâ€ť tax that charges drivers based on how far they go, not how much fuel they buy. According to Blumenauer, the technology needed to make this transition already exists â€”Â itâ€™s simply a matter of making the driving public comfortable with the idea. AndÂ James PethokoukisÂ wants to freeze or abolish the gas tax and devolve transit responsibilities to states and cities. WIth a one-size-fits-all federal program out of the way, he says, local governments can â€śstart calculating what their infrastructure needs really are â€” repairing existing roads vs. building new ones â€” and the best way to pay for them, such as state gas taxes, broader sales taxes, tolls, or Â advancedÂ congestion pricing.â€ť
Whatever we do, though, the damage may have already been done, according toKriston Capps. Nobody in the government really wants to be the one who raised taxes, he says, and â€śeven if construction projects aren’t suspended in the middle of the summer construction season, states may be reluctant to launch big transportation infrastructure projects. If the funding stream is shaky, the infrastructure planning will be, too.â€ť Â â€”Â Jordan Fraade
On to todayâ€™s links: