Marco Rubio's gas tax cuts would give greater flexibility and political fights
Republican presidential candidate Marco Rubio recently introduced a听that cuts the federal gas tax 80 percent鈥攆rom 18.4 cents per gallon to 3.7 cents鈥攁nd eliminates the听听(HTF) Mass Transit Account. Similar to other听, Rubio's plan would radically diminish the federal government's role in transportation projects. States would lose federal dollars and gain flexibility鈥攂ut also inherit political fights.
The federal government currently sends state and local governments more than听a year ($44 billion for highways and $8 billion for transit in 2015) in grants for surface transportation projects鈥攐r a quarter of all public transportation funding. Motor fuel taxes account for 87 percent of HTF receipts. Congress has struggled to balance the HTF and pass new transportation bills in part because the gas tax rate was听.
There are good reasons to reform transportation funding 鈥斕齛nd antiquated funding formulas that do a听听sending dollars to where people work and live. But the arguments in Rubio's plan for killing the gas tax and HTF are questionable. One is stopping "Bridges to Nowhere," but Congress already made headway on this problem when it听. In fact,听听the inability to make political trades has made passing multi-year transportation bills more difficult.
A second is freeing states from "strings attached" to federal funds. HTF dollars definitely鈥攕uch as requirements that local governments contribute 20 percent of spending and labor laws鈥攂ut it's debatable how debilitating these rules are. A 2012听found the feds were "lax" in their oversight and "reluctant" to make states comply with grant requirements.
A third argument is inducing more public-private partnerships (P3s). But the Obama administration is already听听in this area and P3s are not a panacea for infrastructure (ever heard of听?).
After the HTF-funded federal grants are eliminated, most states would have to substantially听听to fill the funding gap. And the quest for more state transportation revenue will create political headaches. While听increased their gas tax rate this year, the legislative fights were nearly always contentious and voters have听听听their disdain for the gas tax at the state and federal level.
Rubio's plan would also create political fights between states. It's hard to see why states would undertake or coordinate projects of regional or national significance like the interstate highway system without the听.
One small but听: Maryland does not want to fund a bus that services Dulles airport (in Virginia) even though Maryland residents benefit from it. Why? Because Virginia does not fund a bus to BWI airport (in Maryland) even though Virginia residents benefit from that. Now envision this fight on every road or train that crosses state lines.
Putting states in the driver's seat on transportation funding has some appeal but also creates new fiscal problems for states already听. And even if states solve those problems, the solutions might not work well for people who rely on interstate travel, or the country.
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