Posted on 08/24/2005 7:17:18 AM PDT by Tolerance Sucks Rocks
OAKLAND, Calif.
SOME MAY TAKE pleasure at the passage of the long-delayed $286.4 billion federal highway bill, which releases for road projects about 65 percent of the funds paid by road users into the federal Highway Trust Fund. However, for those who believe that road users are entitled to the roads they are forced to pay for, this bill raises two questions:
Might there be better ways to finance and supply roads?
How could the obstructive profligacy of Congress be terminated?
In the past, the difficulties of paying for roads made it hard for the private sector to supply them. Despite enormous obstacles, however, in the 19th Century private companies provided 10,000 miles of toll roads in the eastern United States. They rendered good service, before being put out of business by the technologically superior railroads.
The 20th Century saw the development of the internal-combustion engine, and with it the possibility of financing roads by dedicated fuel taxes. Only governments could raise such taxes and -- surprise, surprise -- many discovered that road users could be taxed without the tiresome restriction of the revenue's having to be spent on roads. As a result, road users in all countries lost control of the revenues raised by central governments in road-use charges.
However, help may be on the way. The development of electronic vehicle identification lets road users' accounts be recognized electronically and automatically debited, without the vehicles' having to stop to pay tolls. In the 21st Century it has thus become as easy to pay directly for road use as for electricity and telephone calls -- and it is no longer necessary to finance roads out of tax revenues that only governments can collect. These developments are of profound significance to the financing, pricing, and even ownership of roads.
The owners of the roads, whether private firms or government agencies, can now charge directly for the use of their roads, both to recover costs and to finance the expansion needed to eliminate congestion. Roads can be operated as public utilities, and even sold or leased to private investors. Chicago has leased its Skyway toll road, for $1.8 billion, and a Texas plan would let private firms build the Trans-Texas Corridor, for $1.2 billion, in exchange for the right to collect tolls for 50 years. Oregon is running a pilot program to test the practicability of imposing mileage charges for road use, in place of fuel taxes.
Unfortunately, such arrangements cannot be introduced on a large scale so long as road users' payments must be sent to the federal government, which uses about a third of them for non-road purposes; imposes cost-raising standards and regulations; and subsidizes "recipient" states (such as Alaska, Hawaii, New York and Pennsylvania) and the District of Columbia, at the expense of "donor" states (such as Arizona, California, Colorado, Florida and Texas). Because of the diversions to non-road purposes, and the increased costs associated with federal requirements, road users in most of the recipient states also lose out as a result of federal financing.
Attempts to phase out the federal financing of state roads have drawn negligible congressional support. The latest proposal for change is the Surface Transportation and Taxation Equity (STATE) Act, introduced as House bill HR1097, by Rep. Scott Garrett (R.-N.J). It lets states opt out of the federal system and so free themselves of the associated taxes, regulations and allocations.
If implemented, the STATE Act would destroy the federal financing system, because the withdrawal of the donor states would leave no revenues to subsidize the recipient states. For this reason, Congress is unlikely to support the STATE Act.
That officials in a country's capital should determine expenditures on roads across the country might have been acceptable in the former Soviet Union, but it makes no sense in the United States, where investment in other infrastructure services is determined by consumer demand and profitability.
Legislators in Arizona and Colorado have passed resolutions urging all states to opt out of the present system. And dissatisfied road users in other states should demand that their congressional representatives support the STATE Act; end the current indefensible system; and let all states finance their roads in accordance with the payments of their roads' users.
Gabriel Roth is a transport and privatization consultant and a research fellow at the Independent Institute, where he is editing a book on private-sector roles in the provision of roads.
General and Trans-Texas Corridor PING!
We pay enough in gas tax, and other taxes, to eliminate ALL Federal funding.
Great idea. Let's eliminate all Federal funding for roads. There is no provision for it in the Constitution. Give it back to the states.
The only Constitutional roads provision I know of is for postal roads, and when was the last time you saw one of those? Even the "defense" excuse for Interstates seems weak, since Congress is only authorized, apparently, to establish armies, not determine their means of transport across the country.
Of course, it could be that roads are a legitimate part of armies and navies. After all, ya gotta move 'em sometimes.
Of course, Congress is also authorized to regulate interstate commerce, and one of the definitions of "regulate" is "to make regular by removing impediments." If that was the intent of the commerce clause, then it could very well be that roads are a legitimate function of the federal government. However, I would limit federal funding from the gas tax to Interstate and U.S. highways, not mass transit or bike paths or state and local roads or cute Indian museums.
The whole concept of "federal funds" for highways, block grants, anything sucks rocks. I call it the magic box theory of economics. All the states collect money from their respective citizens and forward it to Washington, to be poured into this magic box we'll label "Federal Gov't".
Theoritically, as that money trickles down through the magic box, past hordes of bureaucrats with families to feed, more "free" federal money comes out the bottom than gets dropped in the top. Oh, it is to laugh!
What really happens is West Virginia gets another Robert Byrd Memorial rest stop (I know just exactly where to place his portrait), Alaska gets a multi million dollar bridge to an island of 50 people with on-demand ferry service. Meanwhile, Texas gets roughly 80-83% of the money we shovel into the magic box.
The trick lets both governments indulge in accounting fantasies that would involve penitentiary time in the real world. Simply put, it violates the most basic law of economcs: TANSTAAFL; There Ain't No Such Thing As A Free Lunch.
Does "regulate" mean "fund"?
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