What’s going on with the transportation bill? Nobody knows. The two biggest players are saying nearly contradictory things.
Jim Oberstar and others on the Transportation Committee want go full speed ahead with a new bill, an outline for which Oberstar released yesterday (details here). Secretary LaHood says let’s pass an 18-month extension of the current bill, get some reforms written in there and then shoot for a new bill in 2011, by which time maybe we’ll have figured out some way of paying for it.
Our take: We’d like to see a new bill passed this year. There is a momentum for reform now and who knows what the world will look like 2011. Maybe we’ll be under attack by gray goo. Maybe there will be a global goat flu pandemic. Or maybe we’ll be even more broke than we are today. Beyond that, the reason that we pass 5-year transportation bills is that big infrastructure projects take a lot of time and planning and state and local officials need certainty that the money will be there to pay for them at all stages. An 18-month bill and then as-yet-undermined bill after that don’t really accomplish that goal.The real problem here is money–that is, how to pay for a $500 billion transportation bill–and the reluctance by the man with lightening quick hands just to do what needs to be done thing and push Congress raise the goddamn gas tax (instead of demanding they don’t). Then we could pay for the new bill. But without any willingness to do that, we stand broke and facing a great deal of uncertainty.
It’s true that currently we’re getting our recession on in a big way. But effect of doubling the gas tax (taking it from 18 to 36 cents a gallon) would be very, very small on the broader economy. Natural market forces have a much greater impact on what people spend on driving. By contrast, if state and local governments start delaying and hesitating over infrastructure investment, that’s a bad scene in many respects and arguably a bigger drag on the economy than an extra couple of bucks when people tank up.
Then there’s the fact the Americans are fully willing to pay more taxes to fund infrastructure investment. In a recent poll by GOP pollster Frank Luntz, a stunning 81 percent of people said that would pay higher taxes to repair and upgrade our infrastructure. But for some reason our government doesn’t want to take us up on it. Raising the gas tax is a perfectly realistic policy choice now with pump prices still relatively cheap. At higher levels, we won’t have this option. Options are blessings — let’s not waste this one.
June 19th, 2009 at 5:25 pm
Amen, brother. I wish someone took the last paragraph of your article above and shared it with the President. That’s probably the way this thing can happen.
June 19th, 2009 at 5:44 pm
So needs to said!
June 19th, 2009 at 8:11 pm
I do not know if raising the gas tax by %100 would be enough.
http://www.txdot.gov/KeepTexasMovingNewsletter/11202006.html#Cost
June 19th, 2009 at 10:05 pm
I’ve heard the plan is to raise the gas tax (not enough) and to raise a bunch of other transportation fees but that they want to wait for the health care rollout since that will also likely include a tax.
June 21st, 2009 at 4:31 am
Dead link: The last link to the poll leads to the story about Obama and the fly. Please fix it, as I want to see the story about the poll!
June 21st, 2009 at 2:18 pm
Oops - that was an important one. Link is fixed.
Jeb
June 21st, 2009 at 2:32 pm
You have convinced me we need gas tax now!!!
June 22nd, 2009 at 8:43 am
Typically, I am against any increase in taxes, but either a gas tax hike or more toll roads is necessary and reasonable. The beauty of these exchanges over other taxes is that they are elective fees: those who use the roads pay for the roads. More tolling would allow this targeting to be even more precise. There is a good bit of angst here in PA over the Fed not allowing us to put tolls on Rt 80.
June 22nd, 2009 at 10:43 am
You know what’s really funny? TransportGooru’s idea of showing the poll to the President already happened. My organization commissioned the Luntz poll in December, and we met with President Obama in March.
Don’t worry, TransportGooru, we’ve been flaunting that 81 percent everywhere we go! Just a note, however. Increasing income taxes by 1 percent to pay for infrastructure is not an actual policy proposal by my organization, it’s just a metric we used to gauge Americans’ willingness to pay for infrastructure.
June 22nd, 2009 at 11:32 am
Thanks for pointing that out, Ken.
Some readers might know Building America’s Future as the group that brings together Gov Rendell, Mayor Bloomberg, and Gov Schwarzenegger in the interest of leading the fight for infrastructure investment in this country. Needless to say, the organization has been doing stellar work.
Jeb
June 22nd, 2009 at 12:45 pm
Your link is to a .com as opposed to a .org. It’s okay, just click my name
June 23rd, 2009 at 11:35 am
There should be a gasoline price *floor* at ~$4.00 at the pump. If it’s naturally lower, then that tax goes to funds.
June 23rd, 2009 at 9:03 pm
I agree with all above, but also believe it’s worth reiterating why the gas tax is a common sense tax. In general, the most economically efficient and fair way to pay for most services is through usage fees. Since roadway use is roughly proportional to gas use, a gas tax is a decent proxy for highway use. In reality, heavy gas users typically pull more weight, and since axle load is geometrically related to pavement wear and failure, a gas tax favors commercial carriers: buses and logistics trucks. Many would argue this is a reasonable subsidy that benefits everyone, but weigh-in stations make up this inequality in the US (other countries are content just the gas tax). Another advantage of the gas tax is that it’s incredibly easy and lowcost to administer, which tolls and VMT meter schemes are not (though slowly getting there). Also, by increasing the cost of driving, a gas tax relieves congestion, improves air quality, and reduces our dependence on foreign oil. Collecting excess revenue from the gas tax can be reappropriated to alternate transport modes to improve mobility for disadvantaged and vulnerable groups by investing in inter and intra-city bus and rail. The best infrastructure projects earn a great return on investment (realized generally as public goods through a robust supply chain that fuels trade and mobility). The new transportation bill should include reforms to promote accountability, transparency, and performance in transportation investments and especially focus on multimodal infrastructure for regional solutions. Let’s move forward with less congestion, a better freight network, and more smart infrastructure. Raise the gas tax, and let’s all get back to getting rich together!
June 26th, 2009 at 7:23 pm
I don’t know why this is so difficult for people to understand- the last time the gas tax was raised was in 1993, the Democratic majority did it, and less than a year later they were no longer the majority. Any politician who seriously pushes an increase in motor fuels tax (including diesel, frowned upon by the trucking industry) (including aviation fuel, whew, alreadly belly-up there) is looked upon as committing political suicide. Americans pay by far the lowest motoring taxes and fees in the world, and as soon as somebody tries to get them to pay for more than 40% of what they want, they start crying until the noise gets swept under the rug.
Key issues which must be addressed soon regarding Highway Trust Fund vs. Insolvency include people driving less (albeit temporarily, last year) and people driving slightly more efficient cars compared with the latter part of the 1990s. The fund has lost over a third of its purchasing power as inflation and new regulations take effect (mostly inflation, since 1993 around 12% in general, approaching 50% for the major highway building materials, steel, concrete and asphalt) so your gas tax dollar is worth about 58 cents compared to the early nineties.
By now, the people who were willing to make such painful changes in where they drive, if they drive, what they drive, and where they drive have already done it. The holdouts are either stuck where they are and driving more efficiently over the same great distances or too arrogant to do anything about it, and they’re keeping the V8 Durango and driving it at full throttle as often as possible with engine computer changes to disable their emission controls.
People who accuse Secretary LaHood of being a “social engineer” are probably members of the arrogant group. If I recall correctly, American voters voiced a slim majority advocating a change in course last fall. That’s what they’re getting. I just think it is unfortunate that such a talented, educated leadership team as the one that exists now will probably be squandered, merely trying to pick up the pieces of what is left of the transportation system instead of doing what they want to do. The opposition, which had governed through raw idealism by default for the past eight years, is now complaining that things are getting prioritized by cost-benefit ratios. Now that the idealism (all highways, the rest are for people we don’t care about) has faded to reason (modal parity as a goal, just seeing some sort of money for starters sure is nice) it’s going to take a few years to recover.
Raise the gas tax, give them a stretch of at least five years to plug all the holes, and take off the blinders to realize there is another way to get there, and it might even make sense!
July 14th, 2009 at 4:28 am
Instead of increasing the present gasoline tax, substitute a new road use tax by implementing a method that uses a bar code on the vehicle that reflects the EPA miles per gallon rating for that vehicle.
July 16th, 2009 at 4:30 pm
[...] In brief, the dust-up concerns their effort to get a new six-year transportation bill passed this year, establishing much-needed policy reforms and boosting spending on transportation infrastucture (which pretty everyone agrees is necessary.) They are doing it in the face of the administration’s plan to stick with the old crappy bill for at least 18 more months and total passivity from the Senate, aggressively making the sensible argument that at a precarious economic moment delaying the bill will depress public investment. Of course, now time is precisely the time this sort of spending should be expanded in order to create lots of jobs–not to mention moving us toward a more sensible transportation policy at a time when climate and energy concerns are looking dire. Sure, there are questions about how to pay for it–but there always are and solving that problem simply involves sacking up and settling on a way to pay for it. [...]
September 20th, 2009 at 8:54 pm
You’re absolutely right, but think much bigger. 36cent tax is still very little. To make real “change” happen, we must significantly increase the price of gasoline, to levels along the lines of Europe.
That is: gasoline should cost at least $6-10 per gallon.
“Real Men Tax Gas”
http://www.nytimes.com/2009/09/20/opinion/20friedman.html?hp