Reason Foundation: Tolling should be highway funding answer

Reason Foundation: Tolling should be highway funding answer
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The Reason Foundation said Wednesday that tolling should be the solution to the transportation funding shortfall has bedeviled lawmakers for the last decade. 

Lawmakers are facing a tight July 31 deadline for the expiration of the current federal transportation spending law, and they scrambling to come up with a way to keep the dollars flowing past month's end. 

The Reason Foundation said in a study that was released on Wednesday that increasing the use of tolling on U.S. roads to pay for new construction projects makes the most sense. 

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The group said its proposal should be supported the nation's trucking industry, which has called for higher gas taxes to pay for fixing roads.  

"The trucking industry has the most at stake in ensuring a solid future for the Interstate highway system," Reason Found Director of Transportation Policy Robert Poole said in a statement. 

"But truckers have been wary of toll roads because they fear, rightly so, that any new Interstate tolling will turn those highways into cash cows for states, with that money being diverted to other projects, not to the highways used by trucks. However, with full use of today's electronic tolling technology, plus strong legal highway user protections, toll-financed Interstate modernization would be an attractive value proposition for truckers and other highway users," Poole continued. 

GOP leaders are racing to beat the July 31 deadline for replenishing the federal government's Highway Trust Fund, which the Department of Transportation has said will run out of money next month without congressional intervention. 

The Senate unveiled a proposal on Tuesday that calls for taking $16.3 billion from the interest rate changes, $9 billion from the sales of reserved oil, $4 billion from customs fees, $3.5 billion from the TSA fees and $1.9 billion from extending guarantees on mortage-backed securities that had been scheduled to start declining in 2021. 

Other funding sources in the measure include approximately $7.7 billion in tax compliance measures that lawmakers have said can raise revenue that can be used to pay for roads. 

The measure also includes a provision that would ease restrictions on a pilot program that allows states to study tolling existing highway lanes, but lawmakers are not counting on any additional revenue from tolling to pay for roads yet. 

Congress has been grappling with the transportation funding shortfall since 2005, and they have not passed an infrastructure funding bill that last longer than two years during that span.  

The main source of transportation funding for decades has been revenue that is collected by the 18.4-cents-per-gallon federal gas tax. The tax has not been increased since 1993, however, and more fuel-efficient cars have sapped its buying power. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in approximately $34 billion annually.

Truck companies and other transportation advocates have pushed for a gas tax increase to pay for a long-term transportation bill, but Republican leaders have ruled out a tax hike.

“While the trucking industry already makes a substantial contribution to the Highway Trust Fund, clearly federal investment is falling short, and we are therefore willing to support an even greater commitment,” American Trucking Association President Bill Graves testified in a House hearing about the highway funding problem last month. 

Congressional budget scorekeepers have estimated it will take about $100 billion, in addition to the gas tax revenue, to fully pay for a six-year transportation bill.

The Reason Foundation said Wednesday that the tolling proposal should appeal to truckers more than the gas tax. 

"Historically, the trucking industry has suggested raising gas and diesel taxes instead of implementing tolls," the group said. "However ... paying for the estimated $1 trillion cost of reconstructing and widening the aging Interstate system would require far more than the modest fuel tax increases being discussed by Congress (which are, in any event, unlikely to be enacted)."  

Poole added that "the new revenue would very likely be spread across all the myriad programs currently supported by the Highway Trust Fund, diverting most of it away from major highways such as the Interstates. Truckers wouldn't get good value for their fuel tax increase."