The Congressional Research Service has published an
excellent new report summarizing the transportation funding options we are
likely to look at during a Reauthorization legislative process (“Funding and
Financing Highways and Public Transportation,” available here).
As they usually do, CRS manages to summarize a lot of
material, some of it pretty complicated, in a readable document that
policymakers can actually use. The
reader can quickly learn where we are in terms of federal surface
transportation funding, how we got here, and what our options are for going
forward (including “do nothing” and let the Highway Trust Fund shrink or
disappear altogether). Although
most of this ground has been plowed before, two sections should be noted for
their fresh treatment. First, the
paper describes the Trust Fund financing problem in a remarkably clear fashion,
with both text and numbers.
A simple spreadsheet (yes, it is possible to use a simple spreadsheet to
communicate complicated information!) sets out the shortfall in high
relief. Second, the authors
provide a two-page legislative history of the motor fuels tax and the Highway
Trust Fund over the past 30 years that reminds us not only of the controversial
nature of the subject but also of the convoluted nature of the Congressional
process. These process issues are
often given little attention, but they are important for the Capitol Hill
audience for whom the paper is oriented.
(They are not for the faint of heart, being essentially a report from
the industrial engineers at the sausage factory.)
However, I do have a few quibbles. I have the same quibbles with most papers done on this
subject, but I want to note them here as they can affect the policy process
that the CRS paper will help to inform.
First, the authors call attention to the growing gap between
motor fuels tax revenues and identified transportation needs, suggesting that
Congress may need to find new sources of income. One of the sources discussed later is indexing the motor
fuels tax. However, I think it is
fairer to say that increasing the motor fuels tax and indexing it and maybe adding a few refinements would in fact
solve the problem, at least for a considerable time
Second, the paper alludes in passing to the “political
difficulty” of raising the gas tax, but I think does not fully recognize that the
perception of that “political difficulty” is pretty much the only reason we are
passing over the obvious solution (increase and index the gas tax) in favor of
more exotic options.
Third, in common with most papers on the subject, the CRS
effort, I believe, seriously underestimates the “political difficulty” of
passing alternative taxes. Do we
really think that the anti-tax forces will be just fine with enacting a
national sales tax or a VMT tax? I
don’t understand why we think that novelty will make the medicine go down
better.
Fourth, I believe that the authors – again in common with
many others – also seriously underestimates the likely opposition to a VMT tax
due to the privacy issue. True,
they suggest that data collection not using GPS systems may provoke less
resistance than a system that does.
That may be so, but remember we live in an age in which enacting a
middle-of-the-road health insurance reform bill leads to talk of nullification
and secession and in which scientists identifying the crisis of climate change
are held to be fraudulent conspirators.
What do you think these people will say about a national VMT tax, even
if it starts out on a low-tech basis?
Fifth, I would have preferred that the report more clearly
point out the difference between “funding” and “financing” options. I think many people still think of PPP
and Infrastructure Bank money as “funding” rather than “financing.” That’s like confusing money you get
from a paycheck with money you get from a payday loan. Last year (here) I called attention to
language I like a lot in a GAO report:
“While these tools have promise to help meet increasing transportation demands,
they are forms of debt that must be repaid, not new revenues. New revenues for transportation
infrastructure investments can come only from two sources: new taxes or new
fees. Ultimately, raising new revenues or reducing transportation spending or
both will be needed.”
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