Time to Discard the Highway User-Fee Myth

Even before Congress has reentered session, a dispute between incoming House Republicans and transportation organizations has erupted over changes to rules that limit how the Highway Trust Fund can be used in spending bills.  The transportation industry claims the new rules will “sever the user-financed basis of the Highway Trust Fund” while Republican leadership says they are about limiting spending on transportation projects to the money that is available.

The keystone-premise common to both of these arguments relies on the gas-tax as a user fee.  A new report by Florida Public Interest Research Group shows that this premise is a fallacy.  

The amount of money a particular driver pays in gasoline taxes bears little relationship to his or her use of roads funded by gas taxes. Drivers pay gasoline taxes for the miles they drive on local streets and roads, even though those proceeds are typically used to pay for state and federal highways. At its inception, the gas tax was originally intended for debt relief.  Since then, the norm has been for gas taxes to fund other purposes in addition to roads.

The report buries the myth that building roads is fiscally conservative and that they “pay for themselves.” Highways do not – and, except for brief periods in our nation’s history, never have – paid for themselves through the taxes that highway advocates label “user fees.” According to a Pew study, user fees in 2007 covered only half the cost of building and maintaining the nation’s network of highways, roads and streets.

Since 2008, the nation’s Highway Trust Fund has been bailed out four times with $35 billion from general funds.  The percent of roads paid for by gas taxes will only continue to drop as people drive less due to increased gas prices and as cars become more fuel efficient.  Even if the gas tax keeps up with inflation, it will cover a dwindling fraction of surface transportation costs.

To make the right choices for our transportation future, the state and the nation need to weigh the full costs and benefits of its investments and then allocate the costs fairly.  Florida needs to make difficult choices about how to fund our state’s troubled transportation system, and as today’s report makes clear, the first task is to discard common myths about how roads are paid for.

Patrick Gittard, Transportation Associate, Florida Public Interest Research Group (PIRG)