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Congress shouldn’t be running the transportation system

Oregon Sen. Ron Wyden has proposed a three-month transportation bill. Three more months, he says, will give Congress a chance to figure out a long-term solution. The only problem is that Congress had three months three months ago and did nothing.

Meanwhile, Sens. Chris Murphy, D-Conn., and Bob Corker, R-Tenn., have proposed to increase gas taxes by 12 cents a gallon. Considering that the gas tax hasn’t been increased in more than 20 inflation-filled years, this would seem to make sense.

It doesn’t, however, because a gas tax increase assumes there is a shortage of funds for transportation. Instead, the real problem is an excess of spending. Congress has mandated spending at fixed levels even if gas tax revenues failed to cover that spending and, as a result, spent at least $55 billion more than the feds have taken in.

Some of that spending may have been essential, but a lot of it was wasted. Probably most of it was spent on things that are really of state or local interest, not of national significance, such as transit and bike paths, all spending on urban roads, and a lot of spending on state highways.

The Highway Trust Fund worked before 1982, when federal gas taxes were dedicated to building the Interstate Highway System. The mission was both simple and self-funding.

Although the interstates make up just 2.5 percent of the nation’s highway lane miles, they account for 25 percent of all highway travel and 20 percent of all passenger travel of all kinds. The gas taxes people paid to drive on the interstates more than paid their way.

In 1982, the interstate system was nearly complete. Congress should have sunsetted the gas tax. Instead, it more than doubled the gas tax and dedicated 20 percent of the increase to transit. With the completion of the interstates in all but a few states, even the highway share of the money got spent on a wide range of other projects.

Instead of a simple mission — build an Interstate Highway System — the mission became complex and often self-contradictory. Maintain infrastructure; enhance mobility; improve air quality; discourage driving; promote transit; build new rail lines; promote economic development; stimulate the economy; stop urban sprawl — the list is endless.

Congress compounded this problem by deciding to mandate spending even if revenues failed to cover the cost. Pay-as-you-go was out the window, so no one had any incentive to contain costs. Light-rail construction costs ballooned from $17 million per mile (in today’s dollars) in 1981 to $110 million per mile today, not counting Seattle’s $626 million per mile University line.

Congress has proven that it can’t handle transportation. The Congress that first diverted gas taxes to transit was run by Democrats. The Congress that first mandated spending even if it wasn’t covered by revenues was run by Republicans.

Our transportation system is vast and complicated, and there’s no reason to think Congress can know where every dollar should be spent any more than it knows what clothes you should wear today or what you should have for dinner tonight. It is time for Congress to say what it should have said in 1982: the Interstate Highway System is finished and new transportation projects, including bike paths, transit routes, and bridge repairs, are of state or local interest and should be funded by state or local governments, not by the feds.

The only real justification for a federal gasoline tax is that it can be collected from oil refiners and importers at a very low cost. If Congress keeps the gas tax, it should distribute it to the states based on a simple formula, one that takes local user fees into account so as to reinforce the importance of user needs–and otherwise have no strings attached.

Better yet, just get rid of the federal gas tax. Gas taxes can be collected locally at only a slightly higher cost than the federal tax. Electronic tolls can be collected pretty cheaply as well, and will allow highway managers to eliminate congestion by varying the tolls. Either way, Congress should get out of the business of trying to run the nation’s transportation systems.

Randal O’Toole is director of the Transportation Policy Center at the Independence Institute, a free market think tank in Denver. A longer version of this piece originally appeared in his blog, The Antiplanner.