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Broke Highway Trust Fund Exposes Bankrupt Politics

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The Tampa Tribune

Published: September 16, 2008

The draining of the trust fund for highways, and an emergency transfer of general tax dollars into it, exemplify much of what is going wrong in Washington.

Members of Congress have spent wildly on low-priority pork projects to win votes in their home districts. They blew millions of fuel-tax dollars on things that had nothing to do with the nation's overcrowded highways and dangerous bridges.

But that's not really why the fund nearly hit bottom this month, threatening to force Florida and other states to delay needed and long-planned highway projects.

The fund is running on empty sooner than expected because we Americans have been driving less this year, a smart reaction to higher fuel prices. Record numbers of us switched to public transit to save money.

Yet instead of encouraging that sensible trend, President Bush earlier this year wanted to transfer money out of the mass transit fund and into the highway fund. Hijacking transit funds would have been a short-sighted fix that would break faith with cities and counties struggling to find ways to expand bus and rail options.

A better alternative was what the Senate and House decided to do: shift $8 billion from general revenue to the highway trust fund.

Until recently, federal Transportation Secretary Mary Peters had opposed a straightforward transfer, saying, "Taking money from other pressing national priorities to plug a hole caused by poor fiscal discipline sets a dangerous and disturbing precedent."

She makes it sound as though reckless spending is the only problem, but it's not. Costs this year have soared for asphalt, concrete, steel and the fuel used by construction equipment. The 18.4-cent-per-gallon federal fuel tax, unchanged since 1993, is not indexed to inflation.

Congress has indeed lacked the discipline to raise the tax, and worse, Republican Sen. John McCain has urged a summer suspension of the fuel tax, an irresponsibly shortsighted way to lower the cost of traveling and temporarily stimulate the economy.

Yet even McCain's idea was better than the original White House plan.

According to the American Highway Users Alliance President Greg Cohen, Bush and his appointees wanted to "allow the highway fund to go bankrupt, expecting that it would happen after they left office. For years they have been an obstacle to restoring the $8 billion in highway user fees diverted from the fund."

The money was used in 1998 for non-highway expenses. Now it is being replaced, which is only fair to motorists. The need for the transfer is unfortunate, but it's not a "dangerous precedent."

What's dangerous are bridges overdue for repairs and congested interstate highways, including 4 and 75 in this area, on which traffic routinely comes to a standstill.

The General Accounting Office reports that "the fiscal sustainability of the numerous highway, transit, and safety programs funded by the Highway Trust Fund is in doubt, because spending from the fund has increased without commensurate increases in revenues."

A partial solution pushed by many anti-tax politicians is the heavier use of tolls, which includes leasing public roads and bridges to investors, most of whom are foreign.

Here in Florida, the state is seeking bids for a long-term lease of the Alligator Alley toll road across South Florida, despite a lack of public support for the idea.

The federal watchdog agency calls it what it is, just another form of debt: "Funds from public-private partnerships are largely a new source of borrowed funds, a form of privately issued debt that must be repaid to private investors."

Tolls are a good market solution because they guarantee that only users pay.

But to accept upfront money now in exchange for higher fees to be paid by our children and grandchildren is not a conservative approach to public finance.

Nor is continued use of income taxes for highway repairs and improvements that should be covered by fuel taxes.

The highway trust fund will soon go empty again if the nation continues to believe the dangerous promise that we can spend now, pay later and keep doing it forever.

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