America, Land of the Pothole
U.S. highways are a wreck for no good reason.
Bloomberg, April 27, 2015
Get in your car and go for a drive just about anywhere in the U.S. You will be confronted with a transportation system desperately in need of a reboot. I’m not referring to a full upgrade to smart roads — the sensor-driven intelligent system that promises to move vehicles more cheaply and efficiently. Rather, I refer to essential repairs: Filling potholes, basic maintenance.
In the U.S., we have allowed a transportation grid that was once the envy of the world to become an embarrassing wreck.
As noted before, since 1993, the U.S. federal gasoline tax has been 18.4 cents a gallon. This money finances the Highway Trust Fund. Adjusted for inflation, the tax is about 10 cents a gallon. It isn’t as if Americans are overtaxed in this respect: The U.S. has the third-lowest gas taxes in the world, with only Kuwait and Saudi Arabia taxing gasoline less.
Unlike most user taxes, the fuel tax isn’t indexed to inflation. According to the Federal Highway Administration, about 70 percent of regular roadway maintenance costs and 80 percent of capital spending is paid for by federal gas taxes, with state and local municipalities covering the rest. As costs for repairs have increased, revenue to pay for ordinary maintenance and repairs has failed to keep pace.
The roads in this country are aging, with the Eisenhower Interstate Highway System coming up on its 60th anniversary. Many of the bridges and tunnels are years or decades past their expected useful lives. Add to that two consecutive brutal winters that did significant damage to roads in the Midwest and Northeast. Find a stretch of asphalt that’s more than a few years old and chances are it will be riddled with potholes and buckled by frost heave.
The need for repairs has never been greater than it is today.
And the Highway Trust Fund? It will be broke by July.
There are many forces driving the fund toward insolvency. First, the tax, adopted in 1932, has never been adjusted for inflation and has to be raised periodically by Congress. Regardless of the need for repairs and basic maintenance, even a modest rate of inflation guarantees that eventually the fund will be exhausted.
Second, the simple fact is that during the recession, Americans droveless. Here we are almost six years after the recession ended and total miles driven by Americans has finally surpassed pre-crisis highs. (By the way, on a population-adjusted basis, miles driven still hasn’t reached the high hit in 2005.)
Last, the U.S. fleet of cars is more efficient than ever. Your fuel-sipping car saves you money each time you fill up, but as a result you send less in tax to the Trust Fund.
The solution is as obvious as it is rational: Raise the gas tax so we can start making the improvements to our infrastructure today; and index it to inflation, so the fund can stay solvent.
The reason we haven’t done that yet is simple: lack of leadership among our elected officials. Simple intimidation explains much. Politicians have become so fearful of the Grover Norquist-type antitax zealot that elected officials refuse to address a significant problem with a justifiable and historically successful solution.
Perhaps cowardly politicians are afraid to admit they must raise taxes to pay for things like roads and bridges. So let’s shift the rhetoric around on this issue. Instead of calling it a gas tax, let’s rename it. I propose “usage fees on America’s transportation network.”
That’s not as catchy as a renaming the millionaire’s estate tax a “death tax,” though it’s certainly more accurate. But at least it’s a start.
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from: America, Land of the Pothole
People don’t really understand why America has an infrastructure deficit. When asked, we usually try to blame it on one political party or the other.
In actual practice, the current deficit is just a function of timing. A huge number of roads were built in the 1960’s and 1970’s that all had a 50 to 60 year useful life. Many of those roads (and bridges!) are now past their useful life. Most of them are still doing a pretty good job, considering their age, but America should have been budgeting for replacement all along.
There are plenty of counties in the U.S. that are paralyzed by the numbers. When they find out they need $2 billion to repair their roads, they look for someone to blame. The fact of the matter is that the shortfall was not created in a single administration, and won’t be solved in one either.
Raising the gas tax is only the first step in confronting the problem. Because it involves common sense and obvious numbers, you can assume that it won’t happen any time soon. For those of you who drive to work over brdges, this is a particularly scary thought.
How about we blame the political party who is actually not passing anything, and not supporting any changes and making fun of the term “shavel ready” instead of DOING ANYTHING…
For those if you returning from Mars or only listening to Fix and reading the WSJ that would be Republicans
The Highway Gas Tax was raised to the current level in 1993 but $0.025 of it was slated to deficit relief. Starting in 1997, 100% was applied to transportation projects. It was not indexed for inflation, so there has been a steady decline in the ability of the Highway Gas Tax to fund transportation since the mid 1990s. Recently, the ,miles driven has dropped and vehicle fuel efficiency has increased, so there are fewer gallons of gas being bought ( a good thing), so that is another reduction in funding.
As a result, the dedicated funding sources for transportation have effectively declined by about 50% over the past couple of decades. It is now a crisis instead of a problem
Really? I’ve got a party for you to blame. How about the Republicans who sit on the bills to upgrade US infrastructure.
Obama put 1/3 of the 2009 stimulus into it.
The GOP’s response was to make fun of the term “Shovel ready.”
it is solely the Republicans.
The Republicans in Congress are petrified of their voters ot wanting new taxes as well as the Tea Party and Grover Norquist pros going after them. You HAVE to contact your Congressman and tell them to come up with a funding solution that involves increasing the gas tax or something similar. Otherwise the No Tax people win and the transportation system (along with other types of infrastructure) will continue to deteriorate.
The Chamber of Commerce and trucking associations have asked for the diesel tax to be increased to pay for improvements (trucks do much, much more road damage than cars, but more lanes and more miles of road are needed for cars). Congress has even refused that.
One of the popular arguments by Tea Party folks is that the states should pay for infrastructure. However, Section 8 of the constitution specifically states:
SECTION. 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;……To establish Post Offices and post Roads;
So taxing in order to pay for a federal road system was put into the constitution before the freedom of speech and religion, the right to bear arms, etc. which were amendments that had to be passed specifically due to disagreement among the authors. The “originalists” in Congress haven’t bothered to read the constitution or its history.
So we need to have a good and vibrant discussion about what constitutes a federal highway, but there should be no debate that it should be an extensive network across the country.
The Republicans only care about one group of people and that’s the people that fund their campaigns so they can get re-elected. The Tea Party and the rest are just pawns.
No, adjusted for inflation, the gas tax is 18.4 cents per gallon today and .11 cents in 1993.
“…The Omnibus Budget Reconciliation Act of 1993, signed by President Bill Clinton on August 10, 1993, increased the gas tax by 4.3 cents, bringing the total tax to 18.4 cents per gallon. The increase was entirely for deficit reduction, with none credited to the Highway Trust Fund. However, the Taxpayer Relief Act of 1997, which President Clinton approved on August 5, 1997, redirected the 4.3-cents general fund gas tax increase to the Highway Trust Fund…”
http://www.fhwa.dot.gov/infrastructure/gastax.cfm
At the time the Republicans called it the largest tax increase in history. But that’s what they always say.
Why anyone believes anything the Republicans say without running it through due diligence in beyond me.
nope. its been static as 18.4 cents a gallon since it was last raised. but with inflation since 1993, it has lost buying power.
ruh roh, raising taxes? it’s anti american, don’t forget this country was founded by taxes evaders
and the last 3 decades are about free lunches, all economic solutions start w/ cutting taxes
also any other policy solution starts with cutting taxes. but its always just for some, odd how that works out huh?
Let’s not forget Bush-Cheney funded their wars with revolving credit and tax cuts costing multiple $ trillions. While we may experience some delays and an occasional collapsed bridge here and there, we can rest assured trickle-down will eventually pay for our Infrastructure.
plus, taxes will be easily push through with our Kochgress
A national transportation system based on private cars is more expensive to maintain over the long run than one based on public transit. This reality has finally caught up to us… as Low Budget Dave points out above we built most of this stuff 50 and 60 years ago.
The GOP better fabricate some more scandals sobtheir dumb ass genuflectors are squawking about something else at their Trailer Park.
Low Budget Dave — I hate to say that your observation that this is all common sense, therefore nothing will happen any time soon, is accurate and depressing.
Oh, and we can’t have robust public transit either, because socialism or something…..
No Need to Raise Taxes
We can borrow right now for 30 years at less than 3% interest. We could raise a trillion overnight and rebuild roads, airports, electric grid, schools, etc. The improvements would pay for themselves.
But everyone is paranoid about the debt which has never harmed us in any way since we went off the gold standard 80 years ago and have been deeply in debt ever since.
Many people probably would pay up for infrastructure renewal. They are reluctant given the governments’ propensity to squander voter resources. No question repairs are needed…but politicians fear vote loss with any scent of a tax…and there’s always a possibility of the next ‘road to nowhere’.
It will take a disaster like the one in Minnesota to make politicians react. Sad but true.
Neither political party ha the stomach to do the right thing: Raise the gas tax, restructure income taxes (personal & corporate), restructure SS & Medicare, and address spending in general (it’s guns or butter time). Sounds like Simpson-Bowles? Yep. Didn’t OB throw that in the trash, after having commissioned it?? Yep. I give you Exhibit-A a to why the Dems don’t have an answer either.
As much as I hate their social views & Ted Cruze, I grow more & more fond of the Tea Party every day. Not another dime in taxes until we set a strategic direction, and truly address some fundemental issues – starting with the IRS. We’ve been pilot-less for 16 years now (and don’t blame the GOP for all those years). We have a leadership crisis in the US on both sides of the aisle. It’s a damn shame.
So, I’m a 1%-er. Have been paying estimated taxes for years now. Last year got caught in the IRS scam where someone filed on my behalf as a WalMart employee, and the IRS sent them a check instantly without any confirmation. Not even the basic check to see the amount of taxes annually I’d been paying for years, which would have instantly noted FRAUD. Stunning. And what did I get this year? A check from the IRS for a $145 (?) “refund”, and yet I am still an estimated tax payer (will cut them a check for thousands in June). What the hell are they doing over there? The incompetence is breathtaking. Your average consumer corporation, with a fraction of the funding, does a better job of fraud prevention and A/R management. We should reach for a flat tax or VAT, and dismantle the IRS as we know it. It’s too far gone to fix.
That is what happens when the people who want to “prove” that government is incompetent cut the budgets for an agency like IRS. Without the resources to do the job right, the agency fails to do it right – and then everybody start bitching that government can’t do it right. Sort of like underfunding highways (that dysfunctional gobinment can’t even keep the roads up). Same thing is happening at the VA. Despite all the complaints about the VA last year most of the VA hospitals have not seen any increase in number of health care providers. Instead the “outrageous” failure to bring down VA waiting lists has been used as an excuse to divert funding into private sector practices that will do the same healthcare at twice the cost (and with longer wait times). More resources drained from the VA system and longer wait times – wash repeat, wash repeat, until it all get transformed into some kind of “voucher care”.