The Trump administration’s proposal to eliminate the core pillar of federal transit funding won’t fix the Highway Trust Fund’s budget woes. Other proposals put forward by this Congress so far haven’t helped much either.
Historical primer
We spend a lot of money on highways, but when it comes to real performance, we do not get a lot out of all that spending. After over a trillion dollars spent over the last 30 years, our infrastructure conditions and road safety are not any better. Part of the reason why we are able to spend so much money is that the Highway Trust Fund (HTF) has a dedicated revenue source that provides consistent payouts—whether or not the funds are needed for the purpose. While it is politically durable, the Highway Trust Fund is not reliable.
Ever since its inception in 1956, the HTF has struggled to cover the repair bill of the massive federally subsidized highway network that we continue to expand today. This first came to a head in the early 1980s, when the HTF, funded at that time by a four-cent per gallon gas tax, was running out of money to both pay the repair bill for the first generation of highways built in the 1950s and 1960s and continue its rapid rate of expansion led by state DOTs. The choice then was to either borrow from the general fund, raise taxes, or match spending to what funds come in and focus on repairing existing assets. In 1983, during the Reagan administration, Congress chose to raise taxes.
Raising taxes, however, is unpopular, and 1983’s five-cent increase in the gas tax was only made possible by a coalition of pro-transit members of Congress who conditioned their supporting votes on one cent of that increase going to transit. Since 2008, instead of having those difficult conversations, Congress has just taken more than $275 billion from all taxpayers to cover the yawning deficit. Despite the fact that transit users—along with all other taxpayers—have been massively subsidizing highway expansion spending for nearly 20 years, transit is being targeted for removal from the Highway Trust Fund.
As a reminder, the issue is highway spending
Eliminating the Mass Transit Account would completely fail to solve the Highway Trust Fund’s deeper problems. The only way out of the transportation funding shortfall is for Congress to once again consider its three options:
- Take from the general fund and deficit spend to keep the status quo going
- Raise taxes on vehicles that already cost far more than many families can afford during an affordability crisis.
- Adjust spending down to match revenues and refocus on repair and reducing highway asset liabilities
We’re in this mess because previous Congresses chose to take money from all taxpayers to prop up a program that is failing to deliver on its promises of safety, state of repair, and mobility. For nearly 20 years Congress has punted on the hard conversations we need to have about the purposes of this program and what we get for our money. And so the nation’s transportation trust fund is rocketing to insolvency, and these proposals are merely rearranging the deck chairs on the Titanic. The unavoidable truth is that we spend ~$20B more per year than the gas tax brings in on just the highway programs alone. Rep. Graves’ recent idea to add new taxes on cleaner vehicles, like hybrids and EVs, would barely make a dent in that number. USDOT could tell Congress to end all transit funding, passenger rail, competitive grants, and scores of other smaller programs and the trust fund would still be speeding toward insolvency. There are serious ways to address this problem, but these proposals from USDOT are not it.
The post Axing federal transit funding won’t solve the Highway Trust Fund’s fiscal woes appeared first on Transportation For America.