Roads cost money. Money loses value to inflation.
Those are economic realities. But many U.S. and state lawmakers aren’t confronting the necessary consequence: As inflation eats into the buying power of gas taxes, gas taxes – or equivalent revenues – must likewise rise to maintain and improve our roads.
The nation’s Highway Trust Fund, funded by the 18.5 cent federal gas tax, has been going broke for years and requiring one bailout after another. Until Tuesday, it looked about to go bust next month.
Without another bailout, Washington and other states stood to lose federal grants needed for ordinary maintenance projects, such as guard rail replacements and safety upgrades at rail crossings. An estimated 700,000 construction jobs were at risk.
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The wreck appeared averted Tuesday when the U.S. House of Representatives approved a scheme to keep the money flowing through the summer construction season. The deal was hardly impressive; it chiefly illustrated how far lawmakers will go to avoid a tax vote.
The chief stopgap is a gimmick some clever soul has dubbed “pension smoothing.” This is a euphemism for letting companies defer some payments to their employees’ pension accounts, thus boosting taxable income, thus producing a revenue bump for the highway fund.
The pensions must be kept whole; this isn’t a well our highways can drink from. But what do pensions have to do with roads in the first place?
The rational move would be to increase the gas tax, which is simply a user fee through which drivers pay for the pavement they drive on.
The current tax – which is not indexed to inflation – was set in 1993. Since 1993, the U.S. dollar has lost 39 percent of its buying power. That’s the main reason the Highway Trust Fund has been running on fumes.
Lawmakers – and the president, for that matter – should explain that the tax should be adjusted for inflation. But too many leaders are reluctant to lead on this issue.
The same goes for Washington. This state has a discouraging list of critically needed projects that remain unfunded – the completion of state Route 167 between Puyallup and Tacoma, for example. For two years now, the Legislature hasn’t been able to approve the funding needed to get them done.
Much of the blame lies with Republican lawmakers who understand the need but don’t dare try to educate their anti-tax constituents. Leadership at times requires bucking public opinion and challenging one’s own supporters.
Highway and transit funding has not always been a partisan issue in Congress or in Olympia.
Democrats drive; Republicans drive; everyone rides something. Congested cities need mass transit to function. We all have an interest in getting people to jobs and goods to market.
The highways wouldn’t have been built in the first place without a bipartisan consensus that they had to be paid for with real money, not fiscal ruses like “pension smoothing.”