As the federal Highway Trust Fund is on pace to run out of money this summer, the Obama Administration has sent Congress a proposed four-year, $302 billion transportation bill that is less a realistic prescription than a preliminary conversation starter about paying for surface transportation projects. One of its proposals will certainly have states talking.
The Grow America Act — a moniker made from acronyms highly contrived even by congressional standards — makes a suggestion that may become the wave of the future. It would allow states to impose tolls on now-free highways with the approval of the U.S. Department of Transportation.
The administration’s bill promises to provide $87 billion to the Highway Trust Fund, in part by reforming the business tax code. The proposed legislation does not embrace the most straightforward and sensible measure: Increase the federal gasoline tax, which feeds the fund.
Before the inevitable cry goes up about raising taxes, it must be remembered that the gas tax hasn’t had an increase since 1993. It is currently set at 18.4 cents per gallon, with the diesel tax at 24.4 cents. The Congressional Budget Office estimates that if it had been indexed for inflation, the gas tax would be about 29 cents per gallon today and the diesel tax would be about 39 cents. Every penny of the tax generates about $1.5 billion for the Highway Trust Fund.
The fund is running out of money because fewer people have been driving in economic hard times, and cars and trucks today are more fuel-efficient. That’s bad news for the fund, but it suggests a relatively painless opportunity to raise the gas tax.
Increasing the tax at least to catch up with inflation is better than raiding the general fund, which was done for mass transit at the start of the fiscal year. But the simple has become complicated in Washington, where the most basic wisdom has been forgotten: You get what you pay for.
By the end of summer, when there’s no money left for federal highway repair, the conversation should turn to the obvious.