While the Highway Trust Fund Collapses, the Federal Government Spends Billions for “High-Speed” Passenger Rail
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Since the 1950s when legislation was enacted to build the Interstate Highway System, Congress has passed, and the President has signed into law, a renewal of the federal commitment to surface transportation infrastructure every few years. While initially dedicated to highways and funded by fuel taxes through the Highway Trust Fund (HTF), federal aid to transit was added to the mix about 30 years ago. This was and is justified by the need to reduce congestion on our roads, particularly in urban areas.
Of course, each renewal of these programs triggered vigorous debates about issues such as raising fuel taxes, equitable distribution of funding among the states and numerous other issues. But the need for a robust federal program to build and maintain a vast national road system was virtually universally recognized. We have had a consensus among those who govern us that interstate commerce, international trade and the right of Americans to have individual mobility over long distances all made such a program essential.
Furthermore, until the end of 2008, the consensus seemed to be strengthening. Two commissions created by Congress in the last surface transportation reauthorization bill focused on the need to find additional funding to expand our highway system and related facilities. While there was disagreement about where to find the money (i.e., higher fuel taxes, or a vehicle miles traveled tax or private investment or some mixture of the three), there was recognition that a projected doubling of freight over the next 20 years would overwhelm our existing system. There was also a consensus that, despite the advertising campaigns of the Class I freight railroads, trucks would have to continue to carry the vast majority of freight.
No more.
The last surface transportation reauthorization bill expired on Sept. 30, 2009. The Obama Administration announced in its earliest days that it opposed any fuel tax increase. Furthermore, the Administration not only hasn’t proposed an alternative source of funding, it hasn’t even sent Congress a request for specific legislation provisions. So the country is limping along with periodic short-term extensions of the old legislation. The House Transportation and Infrastructure Committee became so frustrated with the Administration that it passed a draft bill, but with no numbers in it!
Worse still, because of the recession and other factors, the HTF has virtually collapsed. Over the last two years, Congress has transferred more than $70 billion to highway and transit programs from general revenues and deficit financing. The majority of this money was included, on a one-time only basis, in the so-called “stimulus” bill. Fuel taxes dedicated to the HTF can no longer support current highway and transit programs, much less any expansion. The whole concept of users paying into a trust fund that covers federal surface transportation programs is being undermined.
But the Administration and Congress have poured money into another aspect of surface transportation. Using deficit financing, over the last year and a half the federal government has appropriated more than $10 billion into our rail system, for both passenger and freight service (over 80 percent has gone to “high-speed” intercity passenger service). While most of these dollars have not yet been spent, the U.S. Department of Transportation has been vigorously making grant announcements.
Thus, even though Congress hasn’t passed new surface transportation legislation authorizing such a radical policy change, it is well under way.
If you believe that America needs a strong, growing freight transportation infrastructure system as a key element in a healthy economy, and that trucking must continue to play a vital role in that system, then it really is time to let your senators and house members know. If they don’t hear from you, they aren’t likely to straighten this out. The consequences for us and for our children will be an America ever less able to compete.
Jim Burnley is a partner in the Washington office of Venable LLP, and is widely recognized as one of the nation's foremost authorities on transportation law and policy
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We fail to provide the American Public the facts that would separate the emotional from data driven rhetoric. Jim Burnley makes an excellent case to my point.
As vehicles have and continue to become more efficient (and gas tax collections go down as a result) we should explore different methods for raising needed infrastructure funds. One idea would be indexing highway use taxes to fuel economy improvements AND through increasing gasoline and diesel taxes. But we need to ensure these funds are used without diversion for the primary purpose intended – improving our transportation infrastructure. If a special project is needed (such as, for example, a community Frisbee park or bridal path) let those who benefit from and use the project pay the tax or required fees.
Additionally, an education campaign targeting “Joe and Josephine Public” must be undertaken in order for each citizen to understand the economic reality of gas and diesel tax policy, and the cost of maintaining a world-class transportation infrastructure. Studies should be undertaken which determine the average expenditure each driver makes on fuel-related taxes -- gasoline and diesel. Then we need to educate the public and give motorists perspective on what a modest increase in gas and fuel taxes really equates to. In reality, if you took what we spend each month for a couple of fancy Lattes or a couple Big Mac meals, and applied that toward additional fuel taxes into our Highway Trust Fund, that would go a long way toward providing the necessary funding to maintain and expand critical transportation infrastructure. The only remaining challenge would be putting in stronger safeguards to protect Highway Trust Fund monies from diversion by politicians looking to reward special interest groups as they vie for votes.
Educate the public on the benefits of a well maintained highway infrastructure, including the improvements in personal mobility, more productive freight transport, and a more efficient economy which would result, and I’m confident that prudent voters will support increased gasoline and diesel taxes for the Highway Trust Fund.
C.A.F.E. standards have made vehicles more efficient. The unintended consequence is the reduction in fuel tax revenues. I'm sure back in 1975, when the standards became law, someone thought what is going to happen when vehicles become so efficient that we don't have the money to sustain our highway infrastructure? More than likely that person or persons were shut down as that was a political football no one wanted to handle.
Taxation today is a hot topic especially after the passing of health care reform. No one really knows how we are going to pay for it but the big push by the party in power was don't worry about that, we have to get it passed and we'll worry about everything else later. So additional fuel taxes, on an already overtaxed population that has seen their net worth dwindle or become non-existent, is a very hard sell. You might be able to sell the air conditioner to the eskimo easier than more taxes in these economic times.
Our highway system is vital to our economy. In 1956 the National Interstate and Defense Highways Act was enacted. Eisenhower and his administration understood that we not only had a poor highway system but the ability to move our defense department needs was totally inadequate. A lesson I'm sure learned from transporting troops and their equipment during WWII here and overseas.
If Robert Gates is so focused on cutting the defense budget why isn't anyone proposing that those funds recovered from lower spending on defense go into the highway trust fund? Regardless, a solution to what is fast become a crisis needs to be found. How many more bridges need to collapse before they realize in Washington D.C. that our roads are falling apart? They all need to be reminded of the fact that if you bought it in a store or had something delivered to your home, it got there by truck.