The U.S. Federal Highway Trust Fund will go broke in 2015 - how to fix?

[fskimospy]

I love it when conservatives promote Econ 101 solutions to our problems but do it sarcastically.

Yes, now would be a perfect time to borrow more money to repair the roads. The economy is still depressed and we can borrow at amazingly low rates. Rationally, this is a great time.

 

[3chordcharlie]

The tax is percentage-based. 'Indexing to inflation' is not the issue here.

To deal with alternative fuels, part funding should come from an annual per-vehicle fee.

$20-30/car and 50-100/heavy truck would raise $5-10billion. It's easy enough to do the math from there in terms of how much gas tax revenue to replace with user-fee.

Presumably there are some 'solvable' state/federal jurisdiction issues involved here.

 

[brycejones]

To really do this right it should based on miles driven and type of vehicle regardless of fuel type. But that would require having a mature conversation about the subject which won't happen.

 

[mpo]

The national Federal Highway Trust Fund, which has expenditures of roughly $50 billion per year, will go broke sometime in 2015.

The fund, which relies on an 18.4 cent per gallon gas tax and has annual expenditures around $50 billion, will no longer be able to cover necessary maintenance to the nation's transportation infrastructure by next year, much less cover any new construction or expansion costs.

The federal gas tax has not been raised since 1993, and it's buying power has been slowly eroding due to inflation, increasing vehicle fuel economy, and a decreasing total of miles driven by citizens.

In reality, the Highway Trust Fund has not been self-sufficient since 2008. Transfers from the General Fund have kept the HTF in the black for the past few years. The fund has reached statutory limitations for transfers from the General Fund.

Using fuel-based taxation is not sustainable. It looks like peak vehicle miles traveled happened about a decade ago. The car fleet is getting more fuel efficient. So, even if we raise fuel taxes or peg them to inflation, the pot will still be shrinking.

A couple of other things--a) the feds essentially own/have jurisdiction over no roads in the nation (<1%). Almost all mileage is owned by the states or local road agencies. b) Only ~1/3 of the roads in the nation are even eligible for the federal gas tax. Even that is a stretch, because low-volume roads are not competitive for getting federal dollars.

 

[Slew Foot]

Add it to registration costs, this way you cover the electric hippy cars as well. You can have higher fees for heavier cars as well.

 

[Attic]

add additional tax to the gas tax

or claim "Green" and take more money from folks through any tax an idiot bureacrat can dream up and sell with the punchline being "Green"

I'd expect the tax gets raised and it's done under the ruse of being better for the environment in one manner or another.

That takes care of most of the idiotic bureaucrat sales pitches we can expect. They'll take more from the wrong folks for stupid reasons and under a ruse about why and what they are solving.


Moving on.

Given the roads are deteriorating it would make sense to consider what does the most damage and is causing the deterioration and apply financial solutions there. Fully loaded 18 wheelers do about 10,000 times the damage of a 4000lb car to roads. The weight is more of course for an 18 wheeler, the damage isn't linear. Figure out how to move more transport onto rail or go after trucking companies in a manner that would hit them proportionally for upkeep of the roads they demand.

 

[shady28]

add additional tax to the gas tax

or claim "Green" and take more money from folks through any tax an idiot bureacrat can dream up and sell with the punchline being "Green"

I'd expect the tax gets raised and it's done under the ruse of being better for the environment in one manner or another.

That takes care of most of the idiotic bureaucrat sales pitches we can expect. They'll take more from the wrong folks for stupid reasons and under a ruse about why and what they are solving.


Moving on.

Given the roads are deteriorating it would make sense to consider what does the most damage and is causing the deterioration and apply financial solutions there. Fully loaded 18 wheelers do about 10,000 times the damage of a 4000lb car to roads. The weight is more of course for an 18 wheeler, the damage isn't linear. Figure out how to move more transport onto rail or go after trucking companies in a manner that would hit them proportionally for upkeep of the roads they demand.

This is all six of one half a dozen of another. Tax the trucking companies and they will pass the costs to the retailers, who will pass the cost to the consumer.

Consumption taxes disproportionately hit the low income, middle class, and even upper middle class.

Someone suggested I was being sarcastic when I said just print more money. Far from it. We've already printed more than we can pay back, many thousands of billions of dollars, much of that spent bailing out multi-millionaires on Wall Street. Why on earth would we piss around and not borrow a few billion more when not doing so would result in higher taxes that directly impact working folks?

Maybe if we had a balanced budget we could actually talk about this in a meaningful context. We all know a balanced budget is not going to happen though, so I say just throw this few billion in with the other 17,000 billion we owe.

 

[senseamp]

Pay for highways with higher income taxes, and get rid of regressive gas taxes. Problem solved.

 

[Stewox]

print more green toilet paper

 

[pete6032]

To really do this right it should based on miles driven and type of vehicle regardless of fuel type. But that would require having a mature conversation about the subject which won't happen.

I was hoping that's where this conversation would go. I guess I overestimated.

All the people saying "index to inflation, problem solved" have no understanding of the issue.

Gasoline sales are declining due to increasing fuel economy, so even indexing the tax to inflation will still lead to decreasing revenues. If the average vehicle on the road in the 1990s got 20 MPG then the tax was effectively 18.4 cents per every 20 miles driven or 0.92 cents/mile ($0.0092). Today if the average vehicle gets 25 MPG then the tax is 18.4 cents per every 25 miles drive, or 0.73 cents per mile ($0.0073).

Also the cost of maintaining infrastructure tends to increase as infrastructure gets older, and our infrastructure is aging.

 

[Darwin333]

Except for that part about people using alternative fuels. :whiste:

And exactly what percentage of cars on the roads in the US does that group currently make up? What would you project that percentage to be in 10 years? 15?

 

[pete6032]

And exactly what percentage of cars on the roads in the US does that group currently make up? What would you project that percentage to be in 10 years? 15?

About .03 percent of fuel consumption is from nontraditional sources. I expect this number will increase significantly in the next 10-15 years considering how popular hybrid and electric vehicles are.

Either way you spin it, fossil fuel consumption will end at some point and a motor fuel tax is not a sustainable way to maintain our road infrastructure.

 

[mchammer187]

Trucking and other large vehicles are responsible for the vast majority of the wear on our roads.

I think I read that a truck is more than 1000 times as damaging to a road than a car so the tax should be on them.

Let them raise prices to accommodate these taxes and we can pay the true price of moving goods.


If you are buying anything that is currently trucked than you are using the roads.

 

[Attic]

This is all six of one half a dozen of another. Tax the trucking companies and they will pass the costs to the retailers, who will pass the cost to the consumer.

Consumption taxes disproportionately hit the low income, middle class, and even upper middle class.

Someone suggested I was being sarcastic when I said just print more money. Far from it. We've already printed more than we can pay back, many thousands of billions of dollars, much of that spent bailing out multi-millionaires on Wall Street. Why on earth would we piss around and not borrow a few billion more when not doing so would result in higher taxes that directly impact working folks?

Maybe if we had a balanced budget we could actually talk about this in a meaningful context. We all know a balanced budget is not going to happen though, so I say just throw this few billion in with the other 17,000 billion we owe.

Yep I agree, but as it stands now Trucking Lobbyists are the ones really behind some of the stupidity of how I expect this to play out. It's not really stupidity, it's corruption.

I'd expect trucking companies to pass on costs, but it doesn't mean they shouldn't be the ones paying on more equal terms for the massive disproportionate damage 18 wheelers do to roadways against an average car.

Printing more money is a given, I read that and agreed. There's not a lot of feasible options for the country besides printing money to pay for it's bills. The stealth tax this achieves is much more tolerated than an official tax increase on pay and or necessities like fuel for transport. There's good reason the Fed's balance sheet is ballooning towards 5 trillion, it was the best option, and by best I mean only.

 

[Victorian Gray]

print more green toilet paper

I'd prefer a nice, eggshell blue myself.

 

[Mr.IncrediblyBored]

Switching to a fix it first policy would be a good start. Most states still have their hand out for federal funds for highway expansion. I can think of several recent projects in northeast Ohio that resulted in dozens of new lane miles. We can't even afford to maintain our current infrastructure.

 

[senseamp]

Switching to a fix it first policy would be a good start. Most states still have their hand out for federal funds for highway expansion. I can think of several recent projects in northeast Ohio that resulted in dozens of new lane miles. We can't even afford to maintain our current infrastructure.

Why can't we afford it? Is our real GDP shrinking? Seems like it's still growing.
We choose not to afford it, because we consider lowering taxes on top earners, fighting wars in foreign countries, etc, a higher priority than maintaining our infrastructure. It's a choice.

 

[AViking]

At what point does the USA classify as a 3rd world country?

 

[CPA]

Hey, here's a novel idea, how about stop spending on local transportation projects and keep the focus on the national highway system.

The Feds just ponied up $188M for 10 miles of light rail in Houston. This wasn't a loan, this was a grant. How is this a Federal issue? Why are Californian's and NYers paying for this. If it's needed so badly in Houston, and that is highly debatable, they why isn't Texas or Harris County (which has a transportation administration) or Houston picking up the tab? (I live in Houston btw).

The fact of the matter is that the Federal Transportation Agency has turned from it's original national transportation needs outlook into a local one. And people wonder why costs are going through the roof.

Did you know the original Federal Highway Act was a temporary act and then everything was to be turned over to the states? But you know how Federal government is, once it has it's paws into something, it never lets go.

 

[Genx87]

12 cents? That is it? At least this money is funneled into a useful venture. I say raise it 24 cents and increase rebuilding projects around the country.

 

[schmuckley]

Put 50% of the taxes already collected per gallon of fuel towards it (where it's supposed to be going anyway) instead of 85% of fuel tax going to earmarked programs (pork)
Only 15% of fuel tax actually goes to that fund.
Or they can just shut it all down,collect 0 taxes, bump the state's cut up 15%, let the states handle all roads
and call it a day
win-win on the latter.
Never happen.

 

[schmuckley]

Trucking and other large vehicles are responsible for the vast majority of the wear on our roads.

I think I read that a truck is more than 1000 times as damaging to a road than a car so the tax should be on them.

Let them raise prices to accommodate these taxes and we can pay the true price of moving goods.


If you are buying anything that is currently trucked than you are using the roads.

Oh..so raising the price of Diesel from 1/2 the price of gas to more than price of gas wasn't enough.(which it was for 70 years or better)
That alone has increased the cost of goods throughout the country.
Now you're talking about further taxing transportation?
You sir are a true no-common-sense having person.
PS:Even though the prices are higher,there are less jobs and no people are making any more money;just the government.(which wastes 85% of fuel taxes on pork)
Everyone uses the roads.

 

[Doc Savage Fan]

No problem...the solution to this problem and all our problems is more taxes. We'll say we just want to tax the "rich"...but everyone knows that the real money comes from the ever-eroding middle class. Hell yes...we need more taxes to stimulate the economy! It's all so fucking simple!

 

[Newell Steamer]

Easy; loot the coffers of the investment firms that took out all that money from the US Treasury in '08.

 

[berzerker60]

12 cents? That is it? At least this money is funneled into a useful venture. I say raise it 24 cents and increase rebuilding projects around the country.

Congrats, you just got elected to office in the GOP of 1940s to early 80s and driven out of office by a torch-bearing mob shouting 'RINO RINO!!!' in 2014.