The Highway Trust Fund: Big Wheel, Keep on Turning

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Perpetual Motion by Norman Rockwell(Matt Dellinger, Transportation Nation)  Stephen B. Goddard, in his (very excellent) book Getting There, aptly compared the Highway Trust Fund to a perpetual motion machine. Devised in 1956 to pay for the Interstate Highway System, the HTF, as it’s often abbreviated, pooled gas taxes and other automobile-related revenues and spit them right back out as construction money for more highways, the presence of which encouraged more driving and therefore more revenue, and so on.  As Goddard tells it, the HTF was more of an engineering marvel than the roads it built: “It satisfied those who wanted spending linked to revenues, those opposed to diversion [of gas tax monies to non-highway purposes], and congressmen, who would now have one less vote to justify at election time.”

The magical self-feeding road beast did its thing for fifty years, but now, as transportation writer Yonah Freemark laid out last week, it’s become a much more complicated mechanism.

Dollars have been siphoned off for transit, while extra money has poured in from the general fund. Since 2005, according to a Government Accountability Office report, the vast majority of states have taken more from the HTF than their citizens have put in.

There are those that want to return to simpler times, when gas taxes were road taxes and a man knew that when he filled up his tank he was covering the cost of his highway (supposedly). Last week, the libertarian Reason Foundation put out a report called Restoring Faith in the Highway Trust Fund that complains that “the federal gas tax has become a general-purpose public works tax instead of a true highway user fee.” The HTF should be given back its virtue, they argue.

That’s not likely to happen—at least not without a political power shift. The Congress and the Obama Administration have been clear in their emphasis on “rebalancing” the federal transportation system with greater emphasis (and spending) on high-speed rail, mass transit, and other “livability” projects like bike lanes and pedestrian paths. These priorities don’t jive well with the notion of a single-mode cookie jar like the Highway Trust Fund.

So as the transportation reauthorization debate comes to a head  — sometime between this fall and the end of this decade — the conversation about how to spend infrastructure money will have to be matched by a conversation about how to harvest infrastructure money. Raising the gas tax, they say, is still politically impossible, and we’re not technologically equipped (and we might be too paranoid) for a mileage tax, which could put a transponder in your trunk.

So will we toll new capacity? Lease existing toll roads? Will we tax oil profits, as Pennsylvania Governor Edward Rendell has suggested? Should we tax speculation on oil prices, an idea that Congressman Peter Defazio has put forth? Or could we even harvest the property-tax increment from increased real estate values around new transit stations, as is being contemplated in Texas and elsewhere? And should fairness (or law) dictate that any of these revenue sources be spent exclusively on one category of infrastructure, if exclusively on infrastructure at all?

Just like the elusive post-oil automobile, the future of transportation funding might require some experimentation. For the near future at least, it might look less like a perpetual motion wheel and more like ... a series of tubes.

We’ll explore some of these revenue ideas in more depth in future posts. Anyone with a bright idea, please share it in the comment section to the left.

Matt Dellinger, a weekly contributor to Transportation Nation, is the author of Interstate 69: The Unfinished History of the Last Great American Highway. You can follow him on Twitter.