How to reform federal funding of highways

Government programs are well-nigh impossible to restrain or reform. The federal highway system is no exception. It began in 1956 to help facilitate transportation throughout the country, and the Highway Trust Fund (HTF) was set up to fund the highway system. The HTF was supposed to expire in 1972, and the states were supposed to take charge of funding maintenance of the highways in their jurisdictions. Inertia in Congress keeps HTF reform from happening, but there maybe a light at the end of the tunnel.

Unsurprisingly, the states got addicted to the federal funding from the HTF, so Congress keeps extending it. All the while, politicians in Washington benefit politically from voting to send tax dollars back home for highway projects. Congress just can’t bring itself to reform a federal program that should have expired last century.

{mosads}In fact, Congress recently passed a two-month extension of the HTF when it was set to expire on May 31. According to The Wall Street Journal, some politicians are even considering changing business taxes and “generating one-time revenue for highways and other infrastructure,” to fix the unfixable HTF.

There is a way to break this cycle. Sen. Mike Lee (R-Utah) and Rep. Ron DeSantis (R-Fla.) have recently introduced the Transportation Empowerment Act (S. 1541 in the Senate and H.R. 2716 in the House) to transform the federal role in the highway system.

According to the nonpartisan Congressional Research Service (CRS), approximately 90 percent of the HTF is funded by “an 18.4-cent-per-gallon federal tax on gasoline and a 24.4-cent-per-gallon federal tax on diesel fuel.” As CRS further explains, these funds are used to pay the states for work they do on allowable projects. The states should have started paying for these projects beginning in 1972, but Congress continues to extend HTF funding.

Simply terminating the funding immediately isn’t an option — states would not be ready to assume increased funding right away and important highway projects could suffer. The Transportation Empowerment Act would gradually reduce, over five years, the current gasoline tax contribution from the federal government to the states from 18.4 cents per gallon to 3.7 cents per gallon from the year 2020. The diesel fuel tax contribution from the federal government to the states would fall from 24.3 cents per gallon to five cents per gallon from the year 2020.

This trajectory will put states on notice and provide ample time to transition the bulk of transportation issues back to the states. It allows the federal government to reduce its bankrolling of what are, in fact, state projects, thus helping to restore respect for the 10th Amendment.

Under the Transportation Empowerment Act, federal funding would be refocused on core federal responsibilities. The bill would fund the National Highway Performance Program, the Surface Transportation Program and the Highway Safety Improvement Program, with important reforms to the first two to insure that they are truly focused on highway issues. These programs are truly national in scope, unlike a great deal of current federal involvement in highway transportation issues. The 10th Amendment will no longer be in the rearview mirror under the Transportation Empowerment Act.

The legislation would further concentrate the HTF on highway issues by no longer funding mass transit programs. These programs, favorites of the liberal left, have no direct nexus to the federal highway program, despite those who may claim that efforts to reduce the use of federal highways should get federal highway dollars.

Other programs that piggyback on the federal involvement in highways — such as the Metropolitan Transportation Planning Program, the Congestion Mitigation and Air Quality Improvement Program, the Historic Bridges program and the Transportation Alternatives Program — would be repealed by the bill in order to keep the HTF limited in its scope. States can pursue these programs if they choose.

Our infrastructure is crumbling not because gas taxes are too low, or because not enough money is spent by the federal government on a program that was supposed to end in 1972 or because there aren’t enough federal bureaucrats or federal regulations devoted to highways. Our highways are in poor shape in large part because the federal government is really, really bad at highway management. Just consider the $13 billion deficit the HTF is expected to run this year, and the $180 billion deficit it is expected to run over the next decade.

The founders knew that the federal government would tend to be an inefficient manager of programs, so they gave us the 10th Amendment to keep most of the initiative in governance with the states. Experience confirms the founders’ wisdom. The Transportation Empowerment Act seeks to get highway decisions made more often at the state level, which will increase accountability to the voters. State politicians won’t be able to point a finger at Washington and blame them for decisions they now must make. They will have to answer to the voters who travel the roads everyday. Transportation and our republican form of government will benefit.

Some may claim that states will be unlikely to fund roadway spending as federal dollars are brought down to an appropriate level. However, as The Economist reported, “Ken Orski, a transport analyst, points out that on election day in 2013[,] 70 [percent] of ballot measures to increase or extend funding for surface transport were approved. Last year, voters in Arkansas agreed to a half-cent increase in the sales tax for highway improvements.”

The bill is a serious attempt to address two issues: highway infrastructure and our constitutional infrastructure. The Senate and House should at least have committee hearings on the Transportation Empowerment Act. It is worthy of debate — and becoming law.

Siefring is president of Hilltop Advocacy, LLC and a former Republican House staffer. Follow him on Twitter @NeilSiefring.