In the wake of last month’s game of chicken/debt deal compromise, the country was almost paralyzed again by another fiscal dispute—this time over funding for the Federal Aviation Administration (FAA). Congress couldn’t agree to re-authorize the FAA’s operations, thanks to a disagreement between some Republicans and Democrats over a few million dollars in subsidies for small-town airports. As a result, the federal government lost millions in tax collections, thousands of construction workers lost time as airport renovation jobs were stopped and dozens of vital airline safety inspectors were forced to work without pay to keep the air travel system going. (Maybe that’s the secret to solving our country’s fiscal problems—just stop paying people.) A temporary compromise to fund the FAA through mid-September defused the crisis for the short-term, but it’ll be back up for debate when Congress returns to work in September.
Here’s a really depressing thought, though—the FAA dispute may not even be the biggest Congressionally-made challenge facing the nation’s troubled transportation system. Unless Congress extends it, the 18.4 cents-a-gallon federal gas tax is due to expire on Sept. 30. Normally that wouldn’t be a big deal—under Republicans and Democrats alike, the gas tax has been extended repeatedly since it was first introduced (at 1 cent-a-gallon) back in 1932. Both Presidents Ronald Reagan and George H.W. Bush even raised it! But as the debt ceiling showdown demonstrated, we no longer live in normal times—at least not in Washington—and ultra-conservative activist like Grover Norquist have made noises about opposing the gas tax’s renewal. (Norquist, the head of the advocacy group Americans for Tax Reform, was a major force behind Republican intransigence during the debt ceiling negotiations.) The argument is that lifting the gas tax would offer relief for Americans spending an average of $3.58 a gallon for gas—and in any case, it should be up to the states (which apply their own fuel taxes) to cover spending on road construction and maintenance.
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They’re wrong. Removing the gas tax would be a disaster for our roads, which are already crumbling. Gas taxes account for nearly nine-tenths of the $37 billion Highway Trust Fund, which helps pay for road construction and maintenance around the country, along with other transportation spending. That fund is already in trouble—the gas tax hasn’t been increased since 1993 (back when a gallon cost little more than $1), and in recent years the Treasury Department has had to supplement it, even as Americans have driven more nearly every year, which wears down the roads and adds to traffic. Our roads and bridges are already a mess—in 2009 the American Society of Civil Engineers gave U.S. infrastructure a D grade, and a recent report by the McKinsey Global Institute found that U.S. ranked 23rd globally in the quality of its overall infrastructure, while traffic costs the country $85 billion a year. Removing the gas tax would threaten road maintenance and construction work—an anti-stimulus during a time of 9.2% unemployment—and generally make drivers’ lives miserable.
Speaking to the Boston Herald last week, Democratic Rep. Mike Capuano put the issue in perspective:
Anybody who wants to cut the gas tax is going to have to suggest to me how we get the money to repair our roads and bridges. It’s not generating enough money now to even keep up with our infrastructure needs and if it went to zero I can guarantee you all transportation projects would stop. There would be no bridges fixed and no subways repaired.
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Couldn’t states just step in and replace the federal gas tax with higher state levees on fuel? Technically they could, but given the atrocious fiscal state of the states—and the fact that they can’t run deficits—the temptation would be strong to shift the funds from gas taxes to other uses. And because of population and density, the amount of money that each state could raise from gas taxes would differ widely, which would hurt large but lightly populated states far from the coasts that would earn little in the way of taxes but need to maintain miles of roads. That might not seem to matter if you live in New York or Georgia, but we all benefit from a reliable, nationwide transportation network—which is one of the reasons we built the fairly miraculous interstate highway system in the first place. You might even say that kind of national network—vital to interstate commerce—is one of the reasons for having a national government in the first place, and it’s the kind of public works project the U.S. has done going back to the Erie Canal.
If anything, we could even use a higher gas tax, both to encourage drivers to purchase more fuel-efficient cars, and to raise funds for mass transit. General Motors CEO Dan Akerson has suggested raising the tax by as much as $1 a gallon, which would still leave Americans paying far less than most other countries—in Britain, the tax is more than $4 a gallon. Policymakers may want to consider shifting from a straight gas tax to a per-mile levee, something already underway in the Netherlands. That strikes me as fair—the more you use the roads, the more you pay for their upkeep, although there are legitimate privacy concerns about how the government would track mileage.
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Of course, in the current political climate there’s virtually no chance of anything like that even being discussed, let alone passed. And Americans have very different transportation habits than Europeans—longer commutes mean gas taxes, even at a low rate, can take a big bite from household budgets at a time when so many are struggling to get by. But repealing the federal gas tax really would be a disaster, costing the government an estimated $100 million a day at the very moment when we’re so worried about public debt. Even many mainstream conservative organizations like the Heritage Foundation and the Reason Foundation seem to recognize that this is a bad idea. Let’s hope Congress this September remains temporarily sane enough to realize that.