Highway Transportation Fund Needs More Money – But Not for Roads

Akash Chougule

2/19/2014 12:01:00 AM - Akash Chougule

You may not have heard, but it seems that the federal government may soon come calling for another $100 billion we don’t have - this time for transportation. While many people were focusing on the Congressional Budget Office (CBO) ObamaCare numbers, the agency also released some little-noticed financial details about the Highway Trust Fund’s shortcomings.

The non-partisan CBO projects that the Highway Trust Fund (HTF) will be unable to meet obligations starting in fiscal year 2015, and will thus require either transfers from the General Fund, or – you guessed it – tax increases. Instead, to meet the $100 billion in obligations, Congress should cut spending elsewhere. Congress has continually taken shortcuts in the budget process, allowing them to spend recklessly and without transparency. They should pay for these transportation obligations by eliminating wasteful elsewhere in their appropriations, and keep the Highway Trust Fund’s excessive spending in mind when it considers reauthorization of the transportation bill later this year.

HTF is running out of money because it is not focusing on the most pressing problems of repairing badly damaged roads and bridges, instead wasting money on low-priority projects that sway from HTF’s primary responsibilities. Rather than asking taxpayers to dig even deeper into their wallets or borrowing even more money from our children and grandchildren, the federal government ought to minimize transportation responsibilities, eliminate wasteful spending, and focus on actually improving roads.

Many on the left will use the CBO report to call for increasing the gasoline tax, but this is bad economics and bad principle. Further subsidizing wasteful spending will only make it worse.

From 2008 to 2012, Congress bailed out the HTF with more than $34 billion in general fund transfers. While gas taxes that fund road maintenance can add up to as much as 50 cents per gallon at the pump, only 62 cents of every gas tax dollar the federal government collects is actually spent on roads – with much of that remaining 62 cents often spent on planning and analysis rather than concrete and asphalt. The rest is spent on non-essential luxuries such as horse trails, ferryboats, and covered bridges. Another massive expenditure is transit, which serves just 1.8% of the population. Transit and its larger-scale cousin, Amtrak, are hugely wasteful despite receiving relatively far more in subsidies than auto transport.

Spending HTF dollars on the aforementioned projects that are either inherently local or simply not within HTF purview is bad policy at any time, but this kind of waste is even more egregious in light of the ballooning national debt, which now tops $17 trillion. Congress’ continual avoidance of transparent budgeting practices exacerbates wasteful spending, and transportation has been no exception. Given the state of our nation’s finances, it is high-time the federal government reprioritize its expenditures.

One reason the federal government refuses to focus spending on roads is because so many officials in Washington seem to be less interested in improving our transportation infrastructure than they are in using the heavy hand of government to change our behavior. President Obama’s former Transportation Secretary Ray LaHood admitted as much when he told a group of reporters that the goal of the administration’s transportation policy is to “coerce people out of their cars.” But that misguided hope is hurting Americans and wasting taxpayer dollars in multiple ways.

First, the government should be using gas tax dollars to improve our roadways, not to coerce Americans into particular behaviors. Second, even if the administration manages to force people to drive less, the amount of gas tax revenue will decrease, encouraging lawmakers to back higher fuel taxes at a time when motorists can least afford it.

But President Obama’s administration realizes how politically unpopular a gas tax increase would be. Instead, they want corporate tax “reform” (read: more taxes on business) to pay for the increased costs – shifting the burden to businesses and further empowering the federal transportation bureaucracy to continue its wasteful and irresponsible diversion of HTF funds.

The Highway Trust Fund should get back to fulfilling its core mission of maintaining America’s roads and bridges. Extraneous projects should be eliminated entirely, or left to state and local governments. Such policy changes would help refocus federal transportation policy where it belongs – on improving damaged roads and bridges that millions of Americans use every day – in the process putting the Highway Trust Fund back on stable financial footing and saving taxpayers millions of dollars.