A $286 Billion Highway Bill and No Money to Maintain Highways?
Last summer, Congress passed a $286 billion Highway and Public Transit Act that expires in 2009. A new report funded by the U.S. Chamber of Commerce states that the highway portion of the Federal Highway Trust Fund will reach a zero balance by 2008. The report concludes that revenues from all levels of government will be $500 billion short of the amount needed to maintain road and bridge conditions and traffic levels through 2015. The federal Highway Trust Fund is currently financed by the federal fuel tax. The study stated that, since 1993, the fuel tax has lost a third of its purchasing power. It suggests increasing the tax as a short term solution. Proposals for the long term are a vehicle fee for hybrid and alternative fuel vehicles and replacing the fuel tax with a mileage based tax.
The November 26, 2005 Associated Press report, “Highway fund running on empty,” does not specify whether the vehicle fee on hybrid and alternative fuel vehicles is a one time fee or an annual one. An annual vehicle fee would seem like moving the goal posts after people were encouraged by the government to purchase such vehicles. The recently passed energy bill offers a tax credit, (replacing the previous tax deduction), starting in 2006 for purchasing hybrid vehicles. Tax incentives may have been a factor in some peoples’ buying decisions. If they are to pay vehicle fees on the same cars, many will feel duped, especially if the vehicle fees are larger than the tax credits. Moreover, the federal government used tax incentives in an attempt to decrease our dependence on foreign oil. Wouldn’t a vehicle fee be a disincentive to do so?
The study commissioned by the U.S. Chamber of Commerce says it will take 10 to 15 years to develop mileage based revenue systems tailored to the needs of states and cities. Such a system would offer no incentive for people and businesses to purchase fuel efficient vehicles. Additionally, a mileage based system may place an unfair burden on businesses that provide on-site service or deliveries. Many such businesses purchase fuel efficient vehicles such as those with diesel engines to keep the cost of providing such services in check. A mileage based tax would also penalize those who do not live near their workplaces. Many environmentalists and anti-sprawl activists believe everyone should work near their residences. In Idyllic Village World, everyone could. In the real world, that isn’t always practical. Every industry can’t locate in every neighborhood. People live where they can afford housing and work where the jobs are. Many municipalities are zoned so that commercial and residential areas are not close to one another. Some employers are located in areas where homes are expensive and property taxes are high. Others are located in areas with poor quality public schools.
While unpalatable, an increase in the gas tax does provide an incentive for people to buy fuel efficient vehicles. In turn, that encourages manufacturers to invest in new technology to increase fuel efficiency. Increased fuel efficiency would improve our balance of trade by reducing dependency on imported oil and, additionally, would help improve air quality. However, are increased or additional taxes necessary?
Rather than increasing taxes, Congress should re-work last summer’s $286 billion highway bill. The bill was so filled with pork that Congress neglected appropriations for maintenance of infrastructure. Some projects financed by the bill included: $3 million for a river path in Springfield, OR; $2.7 million to renovate the Packard Museum in Warren, OH; $2.3 million for landscaping along the Ronald Reagan Freeway in California; $2 million to build an “intermodal center” at the Philadelphia Zoo; $2 million for a parking garage in San Antonio; and $1.2 million for improvements to the Blue Ridge Music Center in Virginia. The bill also included $230 million for a bridge from Ketchikan, AK to an island with 50 residents: Congress removed the “Bridge to Nowhere” from the list of protected projects, yet the $230 million remains part of Alaska’s portion of federal highway funds. These are state and local projects that should not be funded by the federal government. If Congress were to de-appropriate funds from these and other projects, those monies could be allocated to the federal Highway Trust Fund.
Although re-allocation would not cover the shortfall in highway funding through 2015, it would be a step in the right direction. It is unreasonable for the government to consider tax increases without first eliminating wasteful spending and funding for projects that are not federal responsibility. The loss of federal funding for state projects may lead to higher taxes in those states. However, the voters in those states have more influence over their state legislators than over Congress as to whether or not projects are funded. Pork projects may please their constituents, but members of Congress should consider what is in the nation’s best interests. Tax increases and a growing national debt affect their constituents, too. Next time Congress creates a highway bill, it should make highways the priority.
Copyright Eva Ellsworth, 11/27/05, all rights reserved
The November 26, 2005 Associated Press report, “Highway fund running on empty,” does not specify whether the vehicle fee on hybrid and alternative fuel vehicles is a one time fee or an annual one. An annual vehicle fee would seem like moving the goal posts after people were encouraged by the government to purchase such vehicles. The recently passed energy bill offers a tax credit, (replacing the previous tax deduction), starting in 2006 for purchasing hybrid vehicles. Tax incentives may have been a factor in some peoples’ buying decisions. If they are to pay vehicle fees on the same cars, many will feel duped, especially if the vehicle fees are larger than the tax credits. Moreover, the federal government used tax incentives in an attempt to decrease our dependence on foreign oil. Wouldn’t a vehicle fee be a disincentive to do so?
The study commissioned by the U.S. Chamber of Commerce says it will take 10 to 15 years to develop mileage based revenue systems tailored to the needs of states and cities. Such a system would offer no incentive for people and businesses to purchase fuel efficient vehicles. Additionally, a mileage based system may place an unfair burden on businesses that provide on-site service or deliveries. Many such businesses purchase fuel efficient vehicles such as those with diesel engines to keep the cost of providing such services in check. A mileage based tax would also penalize those who do not live near their workplaces. Many environmentalists and anti-sprawl activists believe everyone should work near their residences. In Idyllic Village World, everyone could. In the real world, that isn’t always practical. Every industry can’t locate in every neighborhood. People live where they can afford housing and work where the jobs are. Many municipalities are zoned so that commercial and residential areas are not close to one another. Some employers are located in areas where homes are expensive and property taxes are high. Others are located in areas with poor quality public schools.
While unpalatable, an increase in the gas tax does provide an incentive for people to buy fuel efficient vehicles. In turn, that encourages manufacturers to invest in new technology to increase fuel efficiency. Increased fuel efficiency would improve our balance of trade by reducing dependency on imported oil and, additionally, would help improve air quality. However, are increased or additional taxes necessary?
Rather than increasing taxes, Congress should re-work last summer’s $286 billion highway bill. The bill was so filled with pork that Congress neglected appropriations for maintenance of infrastructure. Some projects financed by the bill included: $3 million for a river path in Springfield, OR; $2.7 million to renovate the Packard Museum in Warren, OH; $2.3 million for landscaping along the Ronald Reagan Freeway in California; $2 million to build an “intermodal center” at the Philadelphia Zoo; $2 million for a parking garage in San Antonio; and $1.2 million for improvements to the Blue Ridge Music Center in Virginia. The bill also included $230 million for a bridge from Ketchikan, AK to an island with 50 residents: Congress removed the “Bridge to Nowhere” from the list of protected projects, yet the $230 million remains part of Alaska’s portion of federal highway funds. These are state and local projects that should not be funded by the federal government. If Congress were to de-appropriate funds from these and other projects, those monies could be allocated to the federal Highway Trust Fund.
Although re-allocation would not cover the shortfall in highway funding through 2015, it would be a step in the right direction. It is unreasonable for the government to consider tax increases without first eliminating wasteful spending and funding for projects that are not federal responsibility. The loss of federal funding for state projects may lead to higher taxes in those states. However, the voters in those states have more influence over their state legislators than over Congress as to whether or not projects are funded. Pork projects may please their constituents, but members of Congress should consider what is in the nation’s best interests. Tax increases and a growing national debt affect their constituents, too. Next time Congress creates a highway bill, it should make highways the priority.
Copyright Eva Ellsworth, 11/27/05, all rights reserved
0 Comments:
Post a Comment
<< Home