The Transportation Empowerment Act would empower states by allowing them to keep and control their gasoline tax revenues, set their infrastructure priorities, control their transportation decisions, and partner with the private sector to meet local needs.
Currently, American motorists and truckers pay a federal gas tax of 18.4 cents per gallon at the pump; the money is funneled into the federal Highway Trust Fund (HTF) and funneled back to the states via complex congressional formulas, and billions are diverted each year to programs that do not improve congestion. The current system increases the cost of projects — Davis-Bacon, for example, increases the cost of construction projects by ten percent — and subjects what should be local decisions to the whims of Washington bureaucrats or influential lobbyists.
Put another way, the federal government serves as little more than an expensive pass through for the remainder of transportation funding – one could compare it to a skimming scheme that enriches and empowers folks in Washington to the detriment of those in state capitals across the country. The states and private sector have proven more efficient users of taxpayer money, while the federal government through the Highway Trust Fund has wasted an unjustifiable amount of money through inefficiency, burdensome regulations, and distracting politicization—not to mention paying for the pet projects of lawmakers and special interests.
Not only is this legislation necessary if lawmakers want to improve the efficiency and effectiveness of transportation spending, but it is also timely. The original purpose of the HTF was to construct the interstate highway system, which was considered complete in the early 1990s. But since then, Congresses—lobbied by special interests—have broadened its mission to cover “transit, environmental mitigation, ferry boats, bicycle paths, and nature trails,” which do not benefit those who pay for the program. The Heritage Foundation also notes:
“The combination of overspending, inflation, increased vehicle fuel efficiency, and effects of the recession on gasoline consumption in recent years have caused funding shortfalls in the HTF. Rather than address its overspending problem, Congress chose to shore up the HTF with tens of billions of dollars in general fund cash transfers—an imprudent and unsustainable quick fix that worsens federal deficits.”
This is an unsustainable course of action, which is why Congress is considering yet another bailout of the Highway Trust Fund. What’s more, the Congressional Budget Office estimates another $167 billion in bailouts will be necessary over the next decade. As a result, many states are “responding to the fiscal uncertainties in Washington,” transportation export Ken Orski recently noted:
“Surveys by the American Road and Builders Association (ARTBA), the National Council of State Legislatures and AASHTO and have documented transportation-related revenue initiatives in 27 states.
“In turning to long-term credit to finance costly construction projects, states are following in the footsteps of the private sector. All of the nation’s privately owned infrastructure— railroads, pipelines, telecommunications networks, power plants and refineries— are funded with loaned capital.”
The Transportation Empowerment Act would allow each state to keep this so-called “federal money — which represents just one-quarter of all highway and transit spending — in their states and use them in ways they deem appropriate. It would also provide states relief from federal regulations, allowing the money to go further so that they could put local priorities first and fund projects that provide congestion relief, capacity expansion, and enhanced mobility.
Heritage Action supports the Transportation Empowerment Act.