Road Funding Isn’t Broken. Why Fix It?


James Pethokoukis is skeptical that even with gasoline prices plunging toward the two-dollar mark, Congress will consider raising the gasoline tax. Me too. But then there’s this:

Of course, another idea — as transportation experts Matthew Kahn and David Levinson wrote in a 2011 report — is to just freeze the gas tax as is and use revenue solely to bolster existing roads and bridges, including the addition of new pricing schemes to reduce congestion. Funding for new capacity would come from a new federal highway bank, which would loan money to states contingent on meeting stringent performance tests and demonstrating ability to repay the loans. Other options include axing the tax completely and letting states fund their own projects or public-private partnerships. How about some fresh, innovative thinking on infrastructure rather than defaulting to the status quo?

There are plenty of places where we could use fresh thinking. But is this really one of them? It’s infrastructure development. The simplest and most straightforward way of doing it is to raise money via taxes and then spend it. Loans aren’t innovative. Dumping it all on the states isn’t innovative. Public-private partnerships aren’t innovative.

In fact, all of this is the opposite of innovative. They’re just Rube Goldberg mechanisms to avoid transparent taxation and spending, something that we already do way too much of via subsidies and tax expenditures. Here’s my idea of innovative:

  1. We figure out how much we want to spend on transportation infrastructure.
  2. We decide which taxes are the fairest, most efficient funding source.
  3. We set tax rates to match (1) and (2).
  4. We spend the money.

That’s clear and transparent. It’s reasonably efficient. It’s an appropriate way to fund public goods. What’s not to like?

Generally speaking, my point here is that just because something is traditional doesn’t mean it’s a dinosaur. We should pick and choose our targets for reform and innovation, not use them merely as buzzwords. If you want to build a road, nothing much has changed over the past century. You just need to raise the money and then break ground. You might want to do more or less of it, or build different kinds of roads, or build roads to different places. But funding them? We already know how to do that. Why muck it up?

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