by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Thomas Donlan notes in his latest Barron’s editorial commentary that U.S. Sens. Bob Corker and Chris Murphy — a Republican and Democrat — have attracted little support for their proposal to raise the federal gas tax. The idea is to cover the federal Highway Trust Fund’s unsustainable deficits.
Donlan offers an alternative plan.
[T]he two senators are making little headway against the prevailing philosophies in the capital city. Most Republicans don’t want any federal tax increase; most Democrats want more taxes from corporations, not consumers.
There’s a radical way to cut this Gordian knot: Repeal the federal motor-fuels taxes and let the states finance their own projects from their own resources.
It’s an unequal solution. State motor-fuel taxes vary widely, from eight cents a gallon in Alaska up to a gas-tax rate of 52.89 cents per gallon in California and 54.9 cents per gallon on diesel fuel in Connecticut. But all states could raise their gas taxes by 18.4 cents without raising pump prices.
The feds should stop shoveling free money to projects that are owned and operated by state and local governments for the benefit of the local citizens. If a state wants a new bridge here or fresh asphalt there, let it raise a tax or, even better, slap a toll on the old bridge or road to raise funds for the new one.
The Obama administration recently proposed repealing the law that prevents imposition of tolls on interstate highways. Congress should pass it immediately to prove that lawmakers’ devotion to the cause of infrastructure improvements is something more than political chin music.
If a state prefers fuel taxes to tolls, or a different type of tax, or a different tax rate, or if it prefers potholes to taxes altogether, let the choice be local. Where highway projects benefit more than one state, let the state highway departments cooperate to raise the money. Under the current system they cooperate to pick Uncle Sam’s pocket.
Another possibility for the states: They can make deals with the private contractors that actually build highways. Federal lawmakers can take a short drive to see what Virginia has done on one stretch of the Capital Beltway. The state franchised construction and operation of new toll lanes, using automated toll collection and variable pricing based on congestion. The system improves efficiency and saves state funds.
Motor-fuels taxes are often justified as user fees, but tolls are more direct and fairer. The “freeway” is a fraud: Somebody always pays.