States Should Force Federal Gas Tax Cut
Most of the federal gas tax is temporary, set to automatically expire. If Congress simply does nothing, the tax will automatically drop from 18.3 cents per gallon on September 30, 2016 to just 4.3 cents the next day and thereafter. (The permanent 4.3 cent tax is Al Gore's crowning achievement: a vestige of Bill Clinton's 1993 tax hike that was - try not to laugh - supposed to be dedicated to deficit reduction.)
To allow that date to come and go as scheduled, each state should pass a pick-up law that would take effect if and only if the temporary portion of the federal gas tax lapses.
The pick-up law would replace the lapsed 14 cent federal tax with a lower state gas tax of 8 to 10 cents. Freed of all the strings that come with running money through Washington - most infamously the Davis-Bacon requirements that inflate construction costs - states could easily deliver more while motorists receive a net tax cut.
Momentum would build as more states enacted such laws. There would eventually be a stampede as the expiration date approached and it became apparent that many states, and their congressional delegations, were prepared to let the federal tax expire. Fearing being left out and stuck with no replacement for lost federal gas tax dollars, even the most liberal states might consider pick-up laws as a safeguard.
States and local governments are already responsible for most of the country's transportation spending.
According to the Congressional Budget Office, in 2013 governments at all levels spent a staggering $156 billion on highways and another $60 billion on mass transit. Federal funding was only a quarter of the total. But it comes with all kinds of insidious strings attached to reward union bosses and empower federal bureaucrats, radical environmentalists, and even the nanny-staters who gave us the national 55 miles-per-hour speed limit and 21 year-old drinking age.
The Federal-Aid Highway Act of 1956 established the Highway Trust Fund to dedicate federal gas taxes exclusively to the construction of the Interstate Highway System, which the Eisenhower administration consideration a federal responsibility for national defense reasons. The system was supposed to be completed by 1969, at which time the gas tax was supposed to sunset.
It didn't happen. Instead, the tax was hiked repeatedly, with funds diverted to mass transit starting in 1983. Since the passage of the 1991 bill, funds raised from motorists at the pump have been diverted to bicycle paths, scenic landscape designs, pedestrian walkways, parking garages, and almost any non-highway project you can imagine.
Republicans lost Congress in 2006 in large part because they had elevated wasting federal gas tax dollars to an art form with embarrassing pet projects and earmarks including the infamous Bridge to Nowhere.
Of course, states can and do waste taxpayer dollars too. But running the taxes you pay at the pump through a vast political apparatus and massive bureaucracy in Washington before it returns to the states can only make things worse.
Fortunately, the bulk of the federal gas tax is set to expire. If states seize the initiative and pass pick-up laws, Congress can achieve a major policy victory simply by doing what it's best at: nothing.