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Highway Spending Is Criticized

The U.S. Government collects money from gas taxes to put in the Highway Trust Fund. This money is to fund road construction and repair. Even though it comes out of a trust fund the money is not immune to earmarks and it's management has received criticism for that practice. Recently the Government Accountability Office (GAO) looked at how the fund was being managed. The report was released on July 30th and may be found here.

After reviewing this report Senators McCain (R-AZ) and Coburn (R-OK) wrote a letter highly critical of the use of the fund for non-road related spending. The key criticism is that the fund is almost empty and at a time of economic recession road construction is considered one of the best ways to stimulate the economy. According to the GAO between 2004 and 2008 about $3.7 billion of the fund was used for non-road related matters.

The two Senators feel this spending on pedestrian and bicycle facilities, landscaping, historic preservation and ferries is a misuse of the funds at this time. Not all of the funds even went to transportation related projects. While there could be an argument that supporting other means of transportation then cars is worthwhile it is understandable that there would be criticism of spending that does not aid the movement of goods or people.

To make matters worse the Trust Fund required an insertion of regular funds last year and will most likely get more this year. With the increase in gas prices over the last few years people are buying less reducing the amount of tax revenue as it is fixed at so many cents per gallon. This has led people to look at other ways of generating funds such as making people pay a tax per mile driven. Another option would be to have the gas tax indexed to the price of the gallon such as in England. This does mean though that a rapid increase like last Summer leads to a like increase in the tax making the price per gallon even higher.

In theory when the Trust Fund was set up almost fifty years ago it was assumed that the road construction would pay for itself. The more roads built the more people drove increasing the tax revenue. For a variety of reasons this revenue has not kept up with requirements. It may well be time to review how roads are payed for and built. It may also like a great deal of Federal funding be a time to eliminate earmarks. There are many road projects planned or underway that serve smaller areas but they are directed there by local Senators and Representatives. Senator Byrd (D-WV) has for many years been criticized for this type of spending. Using Federal funds to build roads that end at another state that really are not required for the amount of traffic being carried.

One would hope that this as all Federal spending in a time when the deficit for this year with two months to go is over $1.2 trillion would be gone over to make sure it is providing the maximum benefit. That probably won't happen.