WASHINGTON, July 22, 2014 — The United States Congress and federal agencies are sounding the alert for another bailout. The federal Highway Trust Fund is scheduled to go belly up, according to the Congressional Budget Office (an oxymoron), by August 1 of this year. Such notices have been issued for years and the crisis has been recognized for decades in much the same manner as the Social Security Trust Fund. Here we are once again. Not simply a matter affecting the federal budget, states are also revisiting the same issues.
What is the Highway Trust Fund? President Dwight D. Eisenhower established the Federal-Aid Highway Act in 1956, the premise being that an expanded system of interstate highways were crucial to national security, economic development and related commerce. Congress approved a per gallon fuel tax of 0.03 cents, up from the 0.01 per gallon tax instituted in 1932. From the outset, Congress tapped into these ostensible highway and road maintenance funds for other budget shortfalls, including the costs of two wars. The Federal Highway Act sought to remedy this, and for a number of years, the revenue was dedicated to the stated purpose.
Increases in the federal fuel tax followed the passage of more laws and in 1990, America saw a tax rate of 14 cents per gallon with the Omnibus Budget Revenue Reconciliation Act of 1990 (OBRA90). At that time, the law allowed Congress to siphon a percentage of revenues for deficit reduction. Eventually, the tax crept up to 18.4 cents.
Today, Congress, after having been caught with its hand in the cookie jar, has had to replace the money piecemeal. In fact, since 2008, Congress has had to back fill $41 billion into the trust to keep it solvent and in this year’s appropriations, authorized another $12.6 billion. For 2015, the shortfall is $14 billion. Jerry Bowyer writing in Forbes, describes the dysfunctional nature of Congress’ handling of the Highway fund:
It has become a congressional slush fund, in which almost half the money is ladled out through the corrupt system of congressional earmarks. The next time you drive on a highway which is named after a politician, think corruption. Time to shut it down. The proceeds of the tax should be automatically remitted to state governments, or better yet, regional planning agencies. And regulatory barriers to privatization strategies should be repealed. We’re broke. We can no longer afford to be stupid.
The federal government isn’t the only taxing authority that has mismanaged its affairs. The states have followed Uncle Sam’s profligate footsteps. In Texas, where only 83 cents of every federal gas tax dollar return to the state, only 50 percent of state gas taxes actually go into the road construction and maintenance fund.
The State of North Carolina changed their tax structure to eliminate the auto sales tax, but in replacing it with a highway-use tax, passed a complimentary bill permitting the transfer of hundreds of millions from the trust fund. To date, over a half billion dollars have been diverted from the state highway system.
In Massachusetts, Barbara Anderson, of Citizens for Limited Taxation, said the diversion of tax funds purposed for environmental remediation of underground fuel storage tanks is another example of legislators’ bait-and-switch tactics misspending tax dollars. “The Legislature tricks everybody into supporting the tax and spends the money on what they want to spend it on. They are laughing at us all as they do it.”
Connecticut is contemplating new toll booths to make up for the state’s overspending on non-priorities, to which former Stamford Mayor Dannel P. Malloy, replies, “Tolls shouldn’t even be considered until we have the fortitude to use those monies directly to pay for transportation.”
In 2012, California’s fuel tax produced $8.3 billion in revenue, but not all the money intended for repair and maintenance of roads and bridges, was spent on them. Fuel taxes in California, as in many other states, are pumped into the state’s General Fund and can be re-purposed for anything on the legislature’s wish list.
What’s going on? At both the state and federal levels, politicians are redirecting tax dollars toward projects that sync with a utopian agenda that doesn’t mirror the realities of the world we live in. Public Transit, as a destination of government funds is spectacularly wasteful as a transportation investment, yet it doesn’t stop elected officials from continuing to subsidize it.
USDOT measured the subsidies per passenger per each 1,000 miles travelled. The results:
- Highway users paid $1.91 per thousand passenger-miles.
- Passenger rail received . . . $186.35 per thousand passenger-miles.
- [Mass] transit received $118.26 [per thousand passenger-miles].
The Heritage Foundation’s Ron Utt, notes:
“only about 65 percent of federal surface transportation spending is used to support general-purpose roads, while the remaining 35 percent is diverted to high-cost, underutilized programs like trolley cars, transit, covered bridges, hiking trails, earmarks, administrative overhead, streetscapes, flower planting, hiking and bicycle paths, museums, ‘transportation enhancements,’ tourist attractions, and archeology.”
Globalist elites, posing as American politicians and industrialists see citizens as undertaxed instead of the government overspending. Interviewed in Detroit News, former General Motors’ CEO Dan Akerson floated the idea of a $1 a gallon increase in the gas tax as a way to encourage buyers to purchase more fuel efficient cars. This is the same Dan Akerson whose Cadillac division thanked us for bailing them out, by producing a film praising the accomplishments of the Chinese Communist Party! Akerson’s depth of awareness of ignition switch defects, that may ultimately be tied to the deaths of up to 100 drivers and passengers, is still unresolved.
It’s not a leap of logic to see the agenda of GM and fellow automakers is not to “help the environment” or shore up our crumbling national highway infrastructure, but rather, to alleviate their federal mandate of tighter fuel economy regulations.
Some politicians in Washington D.C. propose to tax Americans for each mile they drive – a pilot program similar to one working its way through California’s legislature. Rep Earl Blumenauer (OR-D), introduced legislation for increased transportation funding. The “Update, Promote, and Develop America’s Transportation Essentials Act” would increase the federal gas tax to 33.3 cents per gallon after 2015 — but would abolish the tax completely by 2025. Replacing it would be “a more sustainable, stable funding source” tied to electronic monitoring of miles driven.
Aside from this being yet another Big Brother / Big Government central planning initiative which critics see as a building block for consolidation of an authoritarian state, there are questions to be addressed regarding the need for such schemes. Why, in all of the media reports about the insolvency of the Highway fund, is there no discussion of government overspending? Why no inquiry into diversion of existing revenue? Government at the state and federal level, is demonstrably bloated and inefficient, not to mention, corrupt. If you tried the misappropriation of revenue that they have indulged in, you’d find out very quickly how you would look in an Orange jumpsuit.
No reasonable person believes it is responsible to allow the roads and highways to deteriorate, but before tax addicts in Washington and Sacramento impose more confiscation of personal income and intrusions of privacy, isn’t it reasonable to require them to get on a government weight loss program? Either they go on “The Biggest Loser” or you will be.