Public Investment in Transportation: The Future of Federal Funding

Public Investment in Transportation: The Future of Federal Funding

Article I Section 8 of the U.S. Constitution, in the seventh clause, declares that Congress shall have the power “To establish Post Offices and post Roads.”

The “post” was considered so important that, in May of 1775, the Continental Congress created a committee charged with the task of creating a postal system. This early system (Benjamin Franklin was the first postmaster) was mostly about sending instructions to and receiving reports from the armies in the field. But with the advent of peace, the development and maintenance of a system for ensuring the efficient delivery of the post became a priority.

Commerce of goods also was on the minds of the Founders (something else Congress was empowered to regulate, at least across state and national boundaries). Many already saw a future in which the livelihood of most Americans would depend, one way or another, on trade.

While most of the work on these roads was done by residents in lieu of paying their local or state taxes, petitions for federal support came early and grew more and more common. The first recorded successful appeal was by Ebenezer Zane in 1796. Zane asked the federal government to grant him land on which he, in turn, would build a road (and ferry services where needed) from what was then Wheeling, Virginia, to the river port town of Limestone in the Kentucky Territory.

There have been thousands of projects since then, thousands of private and public petitioners asking Uncle Sam to help pay to move the post, the people and their products more swiftly. And there have been thousands of appropriations. One might reasonably argue that facilitating transportation is a core function of our national government . . . and, as a matter of historical fact, of the governments in the other layers of our federal system as well.

In the 1950s, our nation chose to seal its commitment to investing in transportation with a trust fund. Federal gas tax revenues were set aside, promising a steady and protected source of funding for the vast interstate highway system that inspired the creation of the trust fund, and for other purposes. In an era of increasing car ownership, increasing miles traveled, and little concern about fuel economy or pollution, everyone could see that the trust fund would remain a solid source of funding for our nation’s transportation needs forever.

Except . . . well, forever really is a long, long time. Events, like the OPEC oil embargoes of the 1970s, the anti-pollution campaigns that began in the 1960s, and more recent and broader environmental and quality-of-life concerns have reduced the revenue-generating capacity of the gas tax even as the costs of new construction (and of maintaining the vast network we have created) have continued to rise.

More than once in recent years (including this July), the flow of funds has nearly dried up.

Sadly, this has been one of many areas in which Congress has found it difficult to resolve both the partisan and the philosophical differences that roil the House and Senate. Should the priority be roads and highways, or transit services, or something else? Should freight or passenger service be given greater emphasis? Building new, or sustaining old? And what is the appropriate distribution of financial responsibility between the national, state, and local governments?

Oh . . . and exactly how are we going to pay for this?

This is the context of recent votes by the House and Senate to patch the leaks in the trust fund for a few more weeks. The fundamental problem is about money, and there is no agreement about where it should come from. The gas tax could be raised, but that revenue stream is destined to be inadequate (and arguably more inequitable) over time, for the same reasons it has been inadequate for a while. Various sorts of user fees are employed or could be introduced, but there’s no consensus about which set of fees will meet the need and not ruffle the feathers of constituents and interest groups too much. The Senate’s six-year authorization bill (which only contains three years’ worth of funding) is an attempt to get over that wall, but its funding hodgepodge is long on creativity and very short on sustainability.

What does this mean for states, counties and cities?

First, it is very likely that Congress will continue to come up with stop-gap measures to put money in the pot. Transportation is too important as a core service and as an economic engine to go over the cliff on symbolism. So the commitments Uncle Sam already has made and continues to make are likely to be kept.

Second, bold and sustainable new initiatives in transportation are unlikely, but not impossible. MAP-21 (the last authorization measure) included some innovative funding for transit and some innovative thinking about how we ensure a good return on the investment of our transportation dollars. So there are glimmers that Congress might come together on the vital issue of transportation and set a meaningful course for the rest of this decade and beyond.

But I’m not holding my breath.

Because the bottom line is money. All the bold vision, all the good intentions in the world, can’t add a single bus to a route or lay a square foot of asphalt without the requisite dollars. That used to be easy; the gas tax seemed like Old Faithful, spouting billions of tax dollars at a predictable rate.

The rate is predictable, and it’s still billions. But the rate is declining as we become more environmentally responsible, and the fewer billions are less and less adequate to the task before us.

So, what does this mean? It means that those who would like to make major changes in the way the “post” gets around their communities, as well as those who’d simply like to maintain the system they have, had best look to themselves for the answers.

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