Investing in infrastructure with a gas tax: Lessons from California
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This past election, California voters weighed in on Proposition 6: a measure aimed at repealing the so called “gas tax.” Proponents of the repeal argued against higher taxation and lost decisively at the ballot box. While this result still leaves roads, bridges, and transit massively underfunded at the state and local level, the root of the issue was the state wanting to fix a problem created by the federal government, where our Congress chronically subsidizes oil and gas at the expense of taxpayers.

The gas tax, at the federal level, funds new infrastructure — such as roads, bridges, and rail — and is critical for addressing the devastating consequences of our cars’ carbon on the environment. The problem is that this tax is not pegged to inflation, and Congress, who has had no political will to raise the gas tax since 1993, has failed to use that power. So, in an act of political courage, states across the country are raising their own gas tax to fund infrastructure and climate resilience projects.

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While advocates for the tax are labeled “tax and spend liberals,” the reality is quite the opposite: I support the gas tax because it makes sense from a market economy point of view. The true cost of driving is not only the cost of car plus gas, but also the wear and tear on roads, costs of alleviating congestion, funding climate resilience, and other costly externalities of driving. The gas tax builds those costs into driving now, rather than burdening future generations with the consequences of our poor planning. It’s the true cost of the driving market.

Most Americans are not interested in subsidizing either carbon polluters or traffic congestion by not charging users the true market price of driving. Instead, when we drive, we want safe roads and understand that those cost money. We want safe, well-marked bike lanes and understand that cars being on the road affect the ability for bikers to operate safely, which comes at a serious cost. We want the ability to build new transit alternatives, which should be paid for by an assessment on the status quo. These are the true costs of using fossil fuels, and whether one is a market liberal, social democrat, or fiscal conservative, there is no excuse for not factoring in those true costs.

The federal gas tax was last raised in 1993 and is not indexed to inflation, which increased by a whopping 64.6 percent from 1993 until 2017. Costs are going up, and taxes should reflect that market-based reality so that we can solve climate and transit stressors.

All this means two very important things for voters. First, California was absolutely right to create a higher gas tax to fix what Washington has gotten so wrong. The proponents of the measure would have been wise to make a serious argument about fixing the faults of Washington subsidizing oil and gas, rather than simply advocating for what was viewed as excess taxation. And second, our newly Democratic Congress and Democratic presidential candidates in 2020 should support plans that would index the federal gas tax to inflation and create a lock-box fund for that money to combat climate change and rebuild our country’s crumbling infrastructure.

This is something that makes sense for progressive democrats, market liberals, fiscal conservatives, and climate hawks all at once: Don’t subsidize gas companies and then stick our kids and grandkids with the bill. Want to bring our country together and actually work on issues the majority agrees on? Start here.

Joel Day, PhD, is Visiting Professor of Peace Studies at the University of San Diego and is a Security Fellow with Truman National Security Project. Views are his own.