Senator Mike Lee (R-UT) and two other senators and joined Representative Tom Graves (R-GA) and 18 other representatives in introducing the Transportation Empowerment Act. This bill would phase out most federal involvement in surface transportation, including 80 percent of the federal gas tax, over five years. In the meantime, federal funds would be given to the states as “block grants” with few strings attached.
As the Antiplanner reads the bill, funds would be distributed to the states using the same highway formulas now found in MAP-21, the 2012 transportation bill. The transit formulas are dropped. However, if a state determines that the highway funds it receives are in “excess of the needs of the state” for highways, that state may use those funds for any surface transportation program including transit and intercity rail.
The bill limits distributions in the first year to about $38 billion, which is the current estimate of gas tax revenues in that year. However, if revenues fall short of that estimate, the bill states that no more funds may be distributed than are actually collected. The gas tax and distributed funds are cut in half in the second year, then by approximately 33 percent per year over the next three years.
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While the Antiplanner thinks this proposal is a great idea, it seems highly unlikely that a Democratic Senate will support it. Instead, many observers believe a divided Congress will pass another two-year bill, like the one passed in 2012, that tinkers with existing programs but does not significantly reduce federal spending–even though that spending greatly exceeds gas tax revenues.
The one thing that might make a difference in 2014 is if the House can get behind a significant reform bill. In 2012, House Republicans failed to support a fairly fiscally conservative bill; for some, it wasn’t fiscally conservative enough; for others, who represented cities with major transit systems, the cuts it proposed for mass transit were unacceptable.
The Transportation Empowerment Act fixes the first problem–it is certainly fiscally conservative–but not the second. That means this bill could even have a problem passing the House, much less the Senate. Instead of putting their efforts into a bill like this, Republicans should find a bill that they can get unified behind and use that to negotiate some serious concessions from Senate Democrats.
The Antiplanner wrote:
The bill’s sponsors point out that 33 states are “donor states,” meaning they nominally get less transportation money from the federal government than the feds collect in gas taxes from their residents. Thus, assuming their legislatures raise gas taxes by the amount of the federal reduction , these states will all “win” under the proposed bill.
The whole donor/donee state issue neglects one thing – we have a (mostly federally-funded), national highway network. Besides, an honest discussion about donor/donee would include all federal taxes collected and all federal expenditures by state, not just highway user revenues.
Putting all that aside, I don’t think this bill assures that the states would be good stewards of the federal investment in their highway networks. If the states were required to raise revenues (either through traditional fuel taxes, tolls or some other means) to properly maintain the extensive federal investment in their highways, then I would have less of a problem with it. One example that comes to my mind is I-95 across South Carolina. The pavement was in terrible condition for long stretches between the bridge over Lake Marion (Santee River) and Florence, yet only thanks to an Obama Administration stimulus grant in 2009 was a extensive milling and repaving done. According to online documentation by the American Petroleum Institute, the only state with lower per-gallon motor fuel tax rates in the East than the Palmetto State is New Jersey. I don’t think that is by coincidence.
Since the feds seem to be making a lot of bad decisions (say, streetcars and pointless rural freeways like I-69), I would be on board with a smaller federal role in transportation.
How about the following compromise:
– distribute federal funds as block grants, to be reduced by 80% over the 5 year period in accordance with the Transportation Empowerment Act
– keep the gas tax at its current level, since it is a useful Pigovian tax on pollution & CO2 emissions; this helps reduce federal deficit (not that I see the deficit as a major problem, but both parties claim to)
– use remaining 20% to support mass transit systems in poor & transit dependent areas
– allow states to toll interstates (solves problem of states not being able to capture revenue from through traffic using gas taxes)
The problem, of course, is that many “conservatives” really do like building pointless rural freeways more than they like fiscal conservatism, and many “liberals” really do like building trophy transit more than they like serving transit dependent populations. Stated priorities vs revealed preference, and all that…
letsgola wrote:
Since the feds seem to be making a lot of bad decisions (say, streetcars and pointless rural freeways like I-69), I would be on board with a smaller federal role in transportation.
The rural freeways are every bit as important as the urban ones when it comes to building a national network of Interstate and non-Interstate freeways and other roads.
How about the following compromise:
– distribute federal funds as block grants, to be reduced by 80% over the 5 year period in accordance with the Transportation Empowerment Act
– keep the gas tax at its current level, since it is a useful Pigovian tax on pollution & CO2 emissions; this helps reduce federal deficit (not that I see the deficit as a major problem, but both parties claim to)
– use remaining 20% to support mass transit systems in poor & transit dependent areas
– allow states to toll interstates (solves problem of states not being able to capture revenue from through traffic using gas taxes)
If the states want to toll Interstates as a replacement for motor fuel taxes, I have no problem with that. It would also open up the possibility of private-sector concession agreements to collect tolls and operate and maintain them (though I do not think federal law allows that right now). I do have a big problem with highway tolls being diverted to transit and other projects that have nothing to do with the roads being tolled (the Pennsylvania Turnpike, the Port Authority of New York and New Jersey and the New York MTA’s Bridge and Tunnel are probably the biggest offenders, though users of Virginia’s Dulles Toll Road will be paying billions in tolls to fund the construction of an extension a Metrorail line to Dulles Airport).
The problem, of course, is that many “conservatives” really do like building pointless rural freeways more than they like fiscal conservatism, and many “liberals” really do like building trophy transit more than they like serving transit dependent populations. Stated priorities vs revealed preference, and all that…
I am a self-identified liberal and am decidedly cool toward any “trophy” transit systems because of the never-ending operating costs and capital cost overruns usually associated with them. I watched the Washington Metrorail system (definitely a “trophy” system) get built from the late 1960’s through today.
As for “pointless” rural freeways, I must respectfully disagree. For example, I am a big fan of the federal taxpayer-funded Appalachian Development Highway System, (ADHS) which is a mix of mostly expressway-class roads, with some freeways mixed-in. The ADHS is making it easier for people and businesses to get their products to market, and for tourists to come and visit. Some of the old arterial-class roads being bypassed in states like West Virginia, Kentucky, Maryland and Virginia were (and are) terribly twisting affairs with steep grades up and down. You can call the ADHS a form of welfare if you wish. It’s the kind of welfare that lets people help themselves.
Given the advanced state of development of the US Highway system, I can see this making sense with a few caveats.
1) States must be truly freed to pursue any revenue course they wish for funding roads and transit, including tolls and a variety of taxes.
2) A minimum performance level must be designated in capacity and maintenance of national system roads, with financial penalties for failure to meet these minimums and the ability to force repairs and improvements. States cannot be allowed to let critical roads decay, be shrunk or degreded, or even be removed because they don’t feel like funding them out of some misbegotten notion of frugality. For example, see the current fiasco in Indiana with the expressway serving the Gary steel mills.
3) A continued federal role is needed for coordination of projects and roads between states and for interstate bridges.
4) Similarly, a continued federal role is necessary for transit systems in interstate metro regions (the entire northeast US is obvious, but lets not forget places like Portland, St. Louis, Kansas City, Memphis, Charlotte, and Chicago), as well as the national air/airport/ATC, rail (Amtrak and FRA), and river systems (USACOE, etc.). The needs of American people and businesses for interstate transportation should not be subject to the whimsy of the states involved – i.e. why we have a federal system in the first place.
“The problem, of course, is that many “conservatives” really do like building pointless rural freeways more than they like fiscal conservatism, and many “liberals” really do like building trophy transit more than they like serving transit dependent populations.”
Mmmmmmm. I like that take. When it comes to politicians the conservatives and liberals put on a good face for the election cycle, but rarely do they walk the walk. I’m reminded of the recent shutdown showdown where the deal that was struck to reopen the (not-so-shutdown) government included a big ole ($$$) earmark for Mitch McConnell. Fiscal conservative my ass!
The important trunk rural interstates (i.e. the ones ending with an “0” or a “5”, plus a few oddballs like I-81) were completed long ago. The ones being built today, like I-69, are redundant, or don’t serve destinations large enough to warrant freeways. I have no problem with trying to improve transportation in Appalachia, but improved arterials are just fine for most of those places. It’s not worth the expense of very high speed alignments and full grade separation.