Maintaining the Infrastructure

Somebody has to pay for the roads and bridges. Ideally, government-maintained infrastructure should be financed through use taxes so everyone pays in accordance with the benefits they receive. A federal and state gas tax regime has been in place for some time, but the federal trust fund is approaching insolvency. Spurred by the decline in oil prices, a bi-partisan group recently introduced the “Bridge to Sustainable Infrastructure Act” to raise the gas tax by as much as 40% to “rebuild our crumbling infrastructure.” Arguably, raising the gas tax might be necessary if the funds generated are insufficient for maintaining highways, but this proposal is fraught with problems and requires deeper analysis.

First, any and all revenue from a gas tax should be used strictly for infrastructure. Currently, this is not the case. According to a 2013 Heritage Foundation study, significant chunks are allocated to bicycle lanes, light rail, landscaping, and even a transportation museum. Before the fund can be deemed insolvent and any tax increase is discussed, these nonessential expenditures must be stripped from the budget.

Second, we need to take a closer look at sources of funds. Proponents of a tax hike claim that one is needed to replenish the trust fund’s expected $168 billion deficit. Without an increase, Congress would likely appropriate general funds to make up the difference. But if this shortfall is to be financed with a gas tax instead of general funds, then the tax increase will free up other funds for other uses, not necessarily road projects. Why not propose a corresponding cut in the income tax to balance the increase in the gas tax?

Third, much of the $787 billion Obama stimulus package was supposed to finance infrastructure, yet relatively little actually went to highway projects. This illustrates the shell game that occurs whenever taxes and spending are assigned to politically popular purposes like highways, safety, and education.

Finally, most politicians assume that all highway maintenance must be government-financed, usually at the federal level. I contend that no funds from a federal gas tax should be used for state or local roads; these can be financed through state or local taxes. Moreover, private involvement through tolls can align the specific costs of infrastructure with users of specific projects without the need for more taxes. Federal government involvement in highways is way out of control both constitutionally and pragmatically, but I’ll save that topic for another day.

To the extent that governments will be involved in financing highway projects, federal and state gas taxes are reasonable options, but 100% of the funds generated must be allocated to actual highway projects and any “necessary” increase in gas tax rates should be balanced dollar for dollar with an across-the-board cut in income tax rates. I don’t expect either of these provisions—especially the second one—to be part of the proposal. The “Bridge to Sustainable Infrastructure Act” is neither sustainable nor completely about infrastructure. It’s jut another tax increase.

4 thoughts on “Maintaining the Infrastructure

  1. if conservatives really care about the environment and the deficit, then raising the gas tax when gas prices are low is the right thing to do. Higher prices will encourage less driving and balance the budget.

  2. ….sigh….higher prices do not discourage driving….show me any proof of this phenomenon…

    Funny how the left always turns it into a “conservative” thing. How about this…it’s FAILED FEDERAL GOVERNMENT!

    Balance the budget??? Do you even understand what’s going on? If they wanted to balance the budget, they could, but they don’t. There is ZERO accountability from the citizens of the US, so they do whatever they want, donkeys, rhinos, whatever, all in it together. They like it when we fight among ourselves, it’s easier for them to “blank” us over.

    I’ll try some of your logic on you…When Obama took office, the democrats controlled both branches of congress…why no balanced budget then? They had all the votes they needed to do it, yet it never happened. Do democrats not care about the deficit or debt?

    You are blinded by refusal to see what’s really going on.

  3. I’ve seen several interviews with Ray LaHood, Sec Transportation, in which he was asked to account for the tax monies. He won’t. This is over $100 billion annually for state and federal gas taxes, not including user fees and tolls. That’s a lot of orange barrels. Don’t fall for it.

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