Washington Should Let Highway Dollars Make a U-turn and Head Home to States

The U.S. Congress has been deadlocked for about three years over re-authorizing the federal highway program. During that time, they have passed temporary extensions of the program. The ninth extension expires at the end of this month.

While Congress idles and lets the program just roll along, year after year, we miss out on debate over whether the current system is working and what the alternatives are.

What happens now is that state governments collect fuel taxes and send the money to the federal government. Then the feds put all the money into a pot and distribute it, mostly by formula, back to the states. The problem is, due to bureaucratic overhead, pork project earmarks, obsessions with funding projects like high-speed rail, and certain demographic and geographic realities, not all the money that a state sends to Washington may come back to pay for road upkeep and construction. And the dollars that do find their way home often have federal strings attached. (Remember the federal 55-mile-per-hour speed limit?)

Arizona has been on the losing end of this for a while. As a “donor” state, we routinely pay more in fuel taxes than we receive back from the federal government.

Rep. Jeff Flake has introduced a bill to require that all states receive back at least 95 percent of the money they pay into the federal highway trust fund. It’s a good step, and one that should be seen as a move toward fundamental reform of the system. But the best thing to do would be to guarantee that each state gets 100{010c6536f15f83a69f09c4467fdfb4a5656804feab27fe0dec71ed1e80da306f} of the fuel tax revenue it collects. And the only way to do that is to eliminate the federal highway system as we know it and instead let states control their highway programs and set their own tax rates and revenue needs accordingly.

As cars become more fuel efficient, how much fuel a driver purchases is becoming a less reliable way to gauge how much driving someone is doing and, subsequently, how much wear and tear they are inflicting on state roads. States need to be able to freely experiment with innovations like open road tolling, which are a better way of aligning the costs and benefits of road use.

That sort of experimentation is limited as long as Washington controls the money.

Learn more:

Stateline: While Congress Stalls, States Worry about Highway Funds

Rep. Jeff Flake: Announcement of Passage of Flake Resolution in House

Cato Institute: Liberating the Roads