If nothing else, the current round of federal transportation legislating should end the myth that highways are a uniquely self-sufficient form of infrastructure paid for by “user fees,” a.k.a. gas taxes and tolls.
With all the general tax revenue that goes toward roads in America, car infrastructure has benefited from hefty subsidies for many years. But at the federal level, the road gang could always argue that the gas tax paid for the Highway Trust Fund. Not anymore.
The gas tax has stagnated at the same rate since 1993, and the Highway Trust Fund has been bailed out so many times over the last decade, it’s hard to keep count. A long-term transportation bill was supposed to fix that. Instead, the six-year bill on its way to passage right now in Washington may finally bury the idea that American highways are wholly paid for by the gas tax.
Despite gas prices plummeting to barely more than $2 a gallon, and despite pressure from interest groups on both the right and left, Congress has never seriously considered raising the gas tax to cover the cost of the federal transportation program. That means roads are in line for way more subsidies.
It’s unclear exactly how much subsidy the final bill will contain, since the House and Senate bills have yet to be reconciled. But it looks like about $85 billion will be needed to fill the gap over six years. Part of that figures to come from raiding the Federal Reserve and part from a gimmicky one-shot tax on “repatriated” overseas corporate profits. Either way, we’re not talking about “user fees.”
In the House bill, the combined subsidy would account for a quarter of the $322 billion in transportation spending over six years. The subsidy will only get larger in future bills as the purchasing power of the gas tax continues to erode, unless Congress can overcome its aversion to asking drivers to pay for roads.