Heritage: Highway Bill Headed the Wrong Way


August 12, 2015

Op-Ed by Michael Sargent, research associate at The Heritage Foundation


After months of squabbling, Congress relented at the end of July and passed yet another multibillion-dollar bailout of the Highway Trust Fund, which will cover payments for highway and transit projects through October. Congress settled on this short-term fix - the 34th since 2008 - after the House turned up its nose to a controversial six-year measure passed in the Senate.

Motorists pay about $40 billion into the Highway Trust Fund every year, primarily through federal taxes on gas and diesel. Yet under the stewardship of Congress, the fund began to run dangerously low as spending is on pace to exceed revenues by $13 billion this year.
And it's only expected to get worse: The fund is projected to amass a $168 billion shortfall over the next decade.

The Highway Trust Fund's dire state is a direct result of the top-down mismanagement. Congress has repeatedly pushed the fund's outlays above revenues to fund projects that have little or nothing to do with highways.

Mass transit projects - which should be local or state responsibilities - receive $8 billion of motorists' gas tax dollars every year. Other diversions, such as the Transportation Alternatives Program, lavish local projects that include sidewalks, landscaping and recreational trails with federal funding that could otherwise be spent maintaining highways.

In effect, someone driving from Houston to San Antonio is chipping in for the $220,000 that Ohio used to restore the 1918 W.P. Snyder Jr. Towboat (sadly, a real recipient of federal gas tax dollars).
Indeed, a Government Accountability Office analysis of the Highway Trust Fund found that out of the $50 billion spent in 2013, a mere $3 billion (just 6 percent) went to actual construction, reconstruction or rehabilitation of major highway and bridge projects. This suggests a dire need to re-evaluate the federal government's role in transportation funding.

And the current top-down system is tilted considerably against Texans, who rely extensively on their highways for commerce and travel. Texas has the most federal-aid highway miles of any state by far - more than 84,000 miles as of 2013, compared to California's 57,000 miles and the state average of 20,000. Yet in 2013, California received $700 million more in highway funds than Texas (not even counting funding for transit).

In fact, Texas was the only state in the union to receive less in highway funding than it paid into it the trust fund through taxes. Congratulations, Texas drivers, you've been ripped off by the feds and the other 49 states.

Of course, the Senate's highway bill - which will likely serve as the starting point for upcoming negotiations with the House - only makes these problems worse.

The six-year, $350 billion bill - ironically nicknamed the DRIVE Act - would do nothing to fix the Highway Trust Fund. Instead of prioritizing highway projects and addressing overspending, the Senate bill brazenly proposes to increase spending out of the trust fund, including $9 billion in additional mass transit funding and over $15 billion in brand new federal programs.
Nor did the bill's authors see the need to pay for all of this new spending. In fact, it only contains enough guaranteed funding for three of the six years, irresponsibly leaving the remainder to be funded down the road or tacked on to future deficits.

The measures the Senate bill uses to finance three years of new spending are, frankly, a disgrace. They include myriad tax increases, increased fees on airline passengers, revenue from selling federally owned oil (which the bill assumes will sell at twice the market rate) and lowering payments made by the Federal Reserve (a purportedly independent entity).

In short, the Senate's proposal is a big-government, tax-and-spend nightmare. It eschews reforms in favor of even more spending, ensuring that the trust fund will only be deeper in the hole when it exhausts its bailout cash in three years.

Here's a better idea: Allow states to manage their own transportation funding directly, thus cutting out the federal government and all the additional costs that come with it. This would end the top-down approach that has shortchanged millions of Texas drivers.

Removing federal control and empowering state governments would put Texans entirely in charge of the state's roads and bridges. Let's allow the states to fix our nation's infrastructure without the need for the congressional hand-wringing that was on display last month and is sure to ensue this fall.