John McCain's proposal for a summer gas-tax holiday has thankfully sputtered. It would have saved less than the cost of a fill-up for the average motorist, but it also would have siphoned off about $10 billion in revenues that pay for roads, bridges, and public transit – already too low for the need.
In 2009, the part of the federal Highway Trust Fund that pays for the repair and construction of roads and bridges won't be able to meet its promises. The part that pays for public transit is expected to follow in 2011. The fund's main source of revenue is the federal 18.4 cent-per-gallon gas tax.
The stress on the fund should serve as a warning. In the near term, the expected shortfall means putting some projects on hold. But the issue is much larger than the 2009 shortfall; it's how to pay for decades of past neglect and decades of demand to come.
Within the next 50 years, the US population is expected to increase by 150 million people. In order to meet the greater surface-transport need, the nation as a whole – states and the feds – will have to invest at least $225 billion every year over the next five decades, according to a January report by a bipartisan national commission headed by the US transportation secretary. Yet the nation is spending less than 40 percent of this amount today.
Unfortunately, the policy mechanics who hammer out transport solutions are divided – and not always along party lines.
One group, which includes the US Department of Transportation (DOT), is pushing a market-oriented fix. This view favors private investment and greater use of tolls and rush-hour driving fees. It argues that fees motivate people to drive at less congested times or use public transit. The DOT has a pilot project with five cities to test such "congestion pricing."
New York Mayor Michael Bloomberg proposed such pricing for parts of Manhattan until he was blocked this month by state legislators who say rush-hour pricing hurts low-income drivers. They typify the other camp that generally wants Washington to spend more on infrastructure (it pays the lion's share of costs relating to Interstate highways, the national highway system – think Route 66 – and much, too, for public transit).
America's transport challenge is so mammoth, it can't be limited to the above either-or positions. Congestion costs hours and pollution, and reducing it through market pricing has worked in cities such as London. The low-income complaint can be met by variable fees or rebates based on income. Private investment, too, is viable, as long as the public interest is protected.
But the feds must do more. The federal gas tax hasn't been raised since 1993, while construction costs have skyrocketed. Americans might be willing to pay more if they didn't fear their tax dollars would go to pork boondoggles like Alaska's "bridge to nowhere," so a new way to evaluate projects must be found.
Neither can states be let off the hook. Minnesotans got the message and recently approved a 5-cent hike in the state gas tax – but also greater oversight of projects. Only 14 states have raised their gas tax in the last decade, and most increases have been modest.
America has the most extensive road and bridge network in the world. It urgently needs to invest in it – one way and another.