Posted on 12/26/2014 4:17:54 AM PST by Kaslin
Too much power being grabbed by Washington -- Obamacare, environmental regulations, education standards. That's a constant complaint of conservatives not only during Barack Obama's presidency but during George W. Bush's as well.
But power is also flowing out of Washington, largely unnoticed, and back to the states and localities. You can see that if you look at transportation policy, which is following the same path as the little remembered federal revenue sharing program enacted in the Nixon years and phased out during the Reagan presidency.
Federal transportation spending has an even longer pedigree, dating from the Federal-Aid Highway Act signed by Dwight Eisenhower in 1956. A few states had already been building limited-access toll highways. The new law instituted a federal gasoline tax to pay for Interstates, as they became known, throughout the country.
It made sense at the time, and for years afterwards. There was much more economic disparity between states then, and federal money could be spread from rich states to poor. Interstates would make trucking transportation cheaper at a time when overregulation was making freight rail uneconomic. Routes between states could be coordinated, connecting all major metropolitan areas (though not those which would become major, notably Phoenix and Las Vegas).
But it doesn't work anymore. Gas tax revenue is flat lining because people haven't been driving as much since 2007. Gas mileage has improved, and increasing mileage standards and electric and hybrid vehicles will reduce revenues all the more.
So gas tax revenues are insufficient to replenish the Highway Trust Fund. Congress could increase the gas tax, but won't; it's highly unpopular and only a handful of members favor an increase. Barack Obama understands that and is not seeking one.
The alternative is to spend money from general revenues. But that puts a squeeze on discretionary spending because general revenues are and will be increasingly needed for entitlements -- Social Security and Medicare. In the meantime, Barack Obama has said, the best Congress "could do would be to stagger through another year" of temporary funding.
In effect, the feds are abdicating and the states are taking up the burden. New roads and bridges are needed in some places and, more important, existing roads need to be maintained, repaired and upgraded. More than 30 states have passed transportation fiscal measures in the last three years, according to transportation expert Ken Orski. Six have increased gas taxes. Others have increased highway tolls, floated toll revenue bonds or have passed sales taxes dedicated to transportation. "The move toward greater fiscal autonomy, self-sufficiency and financial innovation at the state and local level is likely to grow in strength," Orski wrote.
The gas tax, justified as a user fee, is being replaced by tolls, a more efficient measure of use. Transponder technology allows tolls to be levied based on actual use, and fees can be adjusted to discourage congestion at peak-use hours, as is being done in Colorado, Florida, North Carolina, Texas and Virginia. There's a move to public-private partnerships, like the one Canada is using to finance a new Detroit River bridge, in which private capital puts up the cash and is repaid from tolls. Some conservatives complained, evidently on the theory that highways are built and maintained for free. But private decision makers are likely to make better decisions than the feds about where the real needs are.
Democrats have obdurately blocked (and most Republicans have been less than eager about supporting) entitlement program reform, which means that entitlements will continue to squeeze discretionary spending out of federal budgets. Transportation is just a leading example.
Something similar happened years ago with revenue sharing, a program promoted in the 1960s by Brookings economist Joseph Pechman. Pechman argued that revenues from the progressive federal income tax would rise faster than incomes and that Congress should share the largesse with the states. He concocted a formula to reward states with progressive taxes of their own and penalize those without, and it passed Congress in 1972 and was signed by Richard Nixon.
This economic redistribution increased as inflation pushed people with stagnant real incomes into higher tax brackets. In response, Colorado Sen. William Armstrong put income indexing in the 1981 Reagan tax cuts.
That, plus increasing crowding out by entitlements, led to the repeal of revenue sharing in 1987. Now we're seeing the slow-motion disappearance of the Highway Trust Fund. Washington is always trying to accumulate power. But some of it is flowing away.
I don’t think they make trucking transportation cheaper especially with diesel fuel being so high
True, but it also proves government receipts are fungible- they’re not spent on what they’re supposed to be but on whatever is ‘best’ for the politicians.
Sales (consumption) taxes are great, but (like tolls for roads) everyone hates them because they know they are paying them.
If an idea is beneficial and workable, there will be local support for it. The federal government doesn’t need to redistribute tax revenues (which will surely be done on a political basis) to promote development, it just needs to get out of the way. The states will find a better way to get the job done. But unfortunately, politicians only want to spend other people's money to enhance their own careers and power.
New roads and bridges are needed in some places and, more important, existing roads need to be maintained, repaired and upgraded.
Re my point above, what happened to all the stimulus money? Wasn’t that supposed to go to upgrading our national infrastructure? The truth about that is that nobody knows where it all went. The only thing we can be sure of is that it was “re-distributed”.
Most tolls are predicated on a bald faced lie - that it will end when the ‘whatever’ is paid for.
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Just like all government programs. Once they begin, for whatever reason, they never end. You’re right; they become perpetual and grow evermore expensive over time.
+1 Excellent post. You nailed it.
———what happened to all the stimulus money? -——
Money is fungible. When thrown in the pot stimulus money can’t be distinguished from ordinary money.
Tennessee has a very good policy for mantaining Interstate hiway surfaces. The DOT has a rotational resurfacing program about every five years for sections ten or twelve miles long. The stimulus money was thrown into the pot for regular maintenance and for about a year the resurfaced segment had the stimulus sign. The signs are all gone now.
So gas tax revenues are insufficient to replenish the Highway Trust Fund. Congress could increase the gas tax, but won’t; it’s highly unpopular and only a handful of members favor an increase. Barack Obama understands that and is not seeking one.
Here in a nutshell is the scam being perpetrated on the American people. Gas tax revenues have been spent by an out of control Congress on things unrelated to highways. An example might be rail projects, or mass transit boondoggles, etc.
So the idea now is to get states to bail out the Transportation Trust Fund (TTF), which they seem eager to do. Well the fix needs to take place in Washington, before we add to the problem. Do not let your state legislators buy into this scam of continuing redistribution of wealth.
The TTF is only empty because Congress emptied it by spending too much.
Yes, the “ultra-low sulfur” requirement.
Anything to destroy a free market.
They said the same thing about Social Security too.
Any and all of these “lockbox funds” are government Ponzi schemes. All taxes go into the general fund first. An unaccountable scam of historic proportions.
“New roads and bridges are needed in some places and, more important, existing roads need to be maintained, repaired and upgraded.”
True that. But the Fed Trust Fund is depleted by moving it to light rail projects and by a voracious bureaucracy. The light rail projects it funds pay for construction costs, not operating costs and come with very expensive mandates.
The states who accept the light rail money are saddled with light rail systems whose operating costs are about 5x revenue and they still have to comply with the mandates (special buses that pick up and drop off disabled people — operating expenses at 60x revenue). So the states go looking for ways to maintain the system—fees, taxes, public private partnerships.
The transit mandates are designed to push people out of single family homes and cares and into dense, “affordable housing,” clustered around transit locations. The Agenda 21 advocates in the states leap on this and become real estate development districts instead of transit districts, exercising eminent domain to make deals with real estate developers work, with all the corruption that comes with that.
Nothing in this reduces federal gas tax, federal revenue, federal bureaucracy or federal mandates. Nothing in this reduces federal power. It just increases fees, taxes, and bureaucracy at the state level. If that’s power flowing back to the states, you can have it. It’s power and money flowing from the people to governments.
Meanwhile, roads and bridges rot because of spending priorities at both the federal and state level. Light rail is cool. Roads are not.
1. Tolls that are implemented today are never predicated on the assertion that they will end. People in charge of building and maintaining infrastructure know well that the infrastructure is never "paid for" but in fact requires a constant revenue stream for ongoing maintenance and major rehabilitation work. A perfect example of this is the George Washington Bridge, which carries I-95 across the Hudson River between New Jersey and New York City. It probably had a design life of 50-60 years when it was built, but it is now more than 80 years old and as sturdy as ever because of ongoing maintenance and rehab work.
2. The big attraction of tolls (as opposed to a fuel tax) is that it generates revenue that isn't just tied to highway users in general, but is paid by users of specific roads and bridges. This pushes revenue generation one step closer to a true "user pays" system, which is the fairest and most equitable means of financing infrastructure of all.
3. Another attraction of tolls is that they are entirely discretionary for the users. If you don't want to pay the toll, then don't use that particular highway or bridge. Motorists make decisions like this all over the country these days, and it seems to work just fine.
Tax-loving Maryland raises toll fees on bridges even though there is more than sufficient toll money to pay for their maintenance. You see, there is always another “project” to pay for (ostensibly to provide more services) so there’s no end to the never-ending search for more revenues. Maryland even has a rain tax!
There will never be enough money to satisfy the greed of bureaucrats or their political allies.
All taxes go into the general fund first. An unaccountable scam of historic proportions.
...and many of the sheep are buying. For how much longer might be a question. Probably as long as the checks in the mail.
The trucking industry has one of the lowest costs of entry of any major industry in the U.S. today. You can start a trucking firm with very little money, and your revenue stream would be pretty solid simply because there is so much demand for trucking services these days.
During a Thanksgiving snowstorm here in MA, I witnessed the most accidents on 20-mile stretch of interstate than I have ever seen in my previous 40 years of driving here. I counted 13 major accidents. Some were multi-car. Others were cars that had slid far off the road, right to the tree line.
The Mass Turnpike, which is usually clear, even during blizzards, was just as bad, according to people that I work with.
I couldn't figure it out. My guess was that the DPW hadn't salted. But the storm was predicted.
It turns out, according to Howie Carr, that the MA governor, Deval Patrick, has been diverting funds from road maintenance to the EBT crowd.
It's the only explanation that makes any sense. And considering the fact that the state is run by Democrats, the waste is at truly impressive and unprecedented levels.
Yes, an $18 TRILLION debt is not exactly a sign of waning federal power.
Outstanding post!!!!!
Environmental regulations
Save a tree kill a beaver.
“So the idea now is to get states to bail out the Transportation Trust Fund (TTF), which they seem eager to do. Well the fix needs to take place in Washington, before we add to the problem. Do not let your state legislators buy into this scam of continuing redistribution of wealth.”
Here in CO, the talk among a lot of liberals and conservatives is not bail-out but keeping the gas tax money for ourselves and spending it ourselves. Not so sure the state can do any better a job than the feds. It has a huge, corrupt transit bureaucracy, just like the feds, but smaller. More money would fix that.
The other, and completely local problem in CO is that we have a taxpayer bill of rights (TABOR). Any tax increase has to go to the voters. Dems and many R’s despise it. But TABOR doesn’t apply to “fees” and the Democrat supreme court has held that practically any revenue enhancer can be called a fee by the legislature. The gas tax might then be classified as a fee and not subject to TABOR. So if CO took back the gas tax revenue, we would quickly become a state with the highest gas fees in the nation and those fees would fund every union pension fund in the state.
BTW, one could make a good argument that the BUREAUCRATS in all these GOVERNMENT AGENCIES are in fact more consequential than the congress. Reid shelved well over 300 bills so very little was accomplished by the paralyzed congress, whose primary function has been reduced to being a “venue” for political theater.
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