Tom Graves Wants To Reform Transportation Funding

Construction and maintenance of the nation’s highways is mostly paid for by the Federal Highway Trust Fund, which gets its money from the 18.4 cent per gallon gasoline tax. Unfortunately, the trust fund is running out of money, and is expected to be depleted by 2015. Because cars are using less gas and because the gas tax hasn’t been raised since 1993, the Congressional Budget Office estimates the tax should be 10 cents per gallon higher and indexed to inflation in order to remain solvent.

Democrats in the U.S. House have introduced a bill to raise the gas tax by 15 cents a gallon, but raising taxes is not a popular idea with Republicans, especially with 2014 being an election year.

Enter Georgia Rep. Tom Graves, who is proposing the Transportation Empowerment Act, which over a period of five years reduces the federal gas tax to 3.4 cents per gallon and transfers much of road infrastructure funding responsibility to the states. The bill has 26 cosponsors, including Georgia Representatives Paul Broun, Phil Gingrey, Lynn Westmoreland and Rob Woodall. A companion bill has been introduced in the Senate by Mike Lee.

The bill probably wouldn’t affect how much you pay at the pump, because it’s expected that states would raise their gas taxes by the same amount the federal government reduces its tax.

Transferring taxing responsibility to the states, even if the tax at the pump remains the same, would actually add dollars available for road construction. That’s because most states, including Georgia, don’t get back all the money they pay in gas taxes, and because many expensive environmental reviews and other requirements imposed by the federal government would be eliminated.

In his Sunday AJC column, Kyle Wingfield notes Georgia would have had an additional $185 million to spend this year if Graves’ proposal was in effect today.

Congress will need to pass something before the end of the 2014 fiscal year in September because the current transportation bill is expiring. It will be interesting to see if Graves’ bill gets any traction.


  1. saltycracker says:

    So the scheduled new revenue exceeds the federal monies to be spent on the interstate, U.S., state roads and bridges ? Doubt the additional $185 builds one big bridge and doubt it would even begin to maintain the US highways much less interstates and bridges.

    Like local control but not by fuzzy math.The gas tax needs to go up regardless of who collects it and wastes a bundle on admin and favored projects.

    • saltycracker says:

      Guess I’m still stung by Graves who gets money and then says it was someone else that should have known he couldn’t handle it.

      • MattMD says:

        Tom Graves: the epitome of personal responsibility. “What me, repay?”
        I think his (and Chip Rogers) failed investment had delinquent property taxes as well.

  2. Will Durant says:

    I have also been unhappy with the amount of federal motor fuel tax money returned to us but I have to drive across other states every now and again. Some of those federal strings are needed, especially in some of the Rust Belt states and states that don’t have a decent tax base to build and maintain the interstate system as they should. (I’m still pissed at Louisiana for losing a car in a pothole on the freaking interstate there). Plus you have other complications on Interstate projects that are already underway and will run for a decade or more still. And of course what do you use to back Sonny and Gena’s 2 Billion or so in GARVEE bonds which are [Federal] Grant Anticipation Vehicle Bonds if you ain’t anticipating anymore federal grants? I don’t know how many other states have borrowed against their future grants but I do recall that California and Texas were way up there in outstanding highway bonds.

    I would be more interested in a bill that would distribute the federal highway funds proportional to the states as they have collected the motor fuel tax. Same thing in Georgia. Today the state motor fuel tax money has to be distributed evenly to each congressional district as mandated by the State Constitution. It should also be spent proportional by each district’s collection of the tax. Therefore the district that has the most traffic and as it follows, sells the most motor fuels, needs the most back to maintain those roads.

    • MattMD says:

      I’m really not too concerned with it, this isn’t going anywhere.

      Some people at CATO have been pushing this for a while, though they go a bit further and drop fuel taxes in favor of tolls. I’ve also read about a plan in Oregon where miles driven are tracked via GPS and then drivers pay a mileage-based tax. I’m sure government would never abuse that power. Yeah, I know they could ping my cell phone and track me now but that takes a lot more effort and I think a court order sans some emergency.

      In the end this plan would make GDOT that more powerful which worries me more than our return rate from the Fed’s.

      • Dave Bearse says:

        The advantage of a motor fuel tax is that it encourages energy.

        A better system would feature both elements of a gas tax and additional taxes on trucks that geared toward basic wear and tear costs of vehicles on roads, and another element that captured the capacity elements, where and when as they relate to constrained or excessive capacity.

        • saltycracker says:

          Taxing gas taxes individual consumption. Taxing trucks taxes everyone regardless of energy use…trucks deliver our stuff and their costs are baked into our stuff. And they pay a road use tax.

          • Will Durant says:

            Yes but some studies I’ve seen found that one 80,000 lb. truck causes the equivalent wear and tear as 10,000 economy cars. Long haul freight in Europe is still primarily rail as their fuel taxes have always been much higher than the US. I remember paying the equivalent of $3.00 a liter over there in the 80s and the bulk of that was in tax. At the behest of lobbyists from GM, Good Year, Exxon, etc. we have effectively subsidized inefficient trucking with low taxes since the 50s. Our rail systems have atrophied to 3rd world status as a result.

            Motor fuel taxes should be increased and at least keep pace with inflation. The General Assembly finally passed a method for the low rates we do pay to keep this pace and what does the Guvna’ do? He nullifies an “automatic” one cent increase in lieu of supporting the TSPLOST boondoggle to tax everything else. The Republicans need to kiss off the fancy workarounds whispered to them by their favorite lobbyists and increase the most equitable way to pay for roads, the motor fuel tax.

            • gt7348b says:

              This has got to be one of the most the intellectually sounding ignorant statements I’ve seen on this site (and that’s saying something). Freight rail in the United States is one of the most efficient and cost effective modes of long distance transport in this country. The Europeans have an atrophied freight rail network with only Estonia, Latvia and Lithuania with an over 40% modal freight rail in the entire EU 27 (see page – – US has a 40% rail freight modal split: While the US passenger rail network leaves a lot to be desired, the freight rail network has the highest mode share of freight movement in the US.

              While I totally agree Rep Graves proposal is idiotic, please don’t make arguments against it using factually incorrect points.

          • Dave Bearse says:

            If the costs are baked into the stuff “we” buy, why tax freight at all? No, the tax is baked into the stuff that buyer’s buy (which granted we all are in some measure, but some much more than others).

            And there’s the rub. Motor fuel is underpriced (with respect to the costs it inflicts on the environment and the infrastructure used by trucking is significantly subsidized by non-freight transportation and general revenues (SPLOSTS, property taxes, etc) (more with respect to the trucking industry than other freight modes). It’s part of the explanation of why Georgia chickens are being shipped to China for processing, then shipped back to the US for consumption. Ridiculous.

            It’s “business-friendly” policy when I think we should strive for market-friendly, where costs are born by beneficiaries sans some other overriding public benefit.

  3. northside101 says:

    First time on Peach Pundit I recall seeing a “rail debate”—as in whether our rail system is “third world.” One might make that point when it comes to passenger service—obviously we don’t have nearly as extensive a network as we did at the time of World War 2—and the only high speed electric trains we have on Amtrak are along the Boston-Washington Northeast Corridor and Philadelphia to Harrisburg, PA. All other Amtrak service is on freight lines, with diesel locomotives (such as would be the case if you took Amtrak’s Crescent from here to DC, on the Norfolk Southern line). And diesel-run trains cannot do the speeds of the electric ones, though some of that is due to sharing of lines with the freight trains—Norfolk Southern and CSX (the main rail lines in the East) limit passenger train speeds with this in mind. In any case, no we don’t match Europe’s high-speed network in terms of density..

    GT is right when it comes to the freight component—certainly we are not third world at that. The four largest rail companies in the US—BNSF and Union Pacific (mainly in the West) and NS/CSX (in the East) each year spend billions of dollars on capital improvements—more track, more sidings, signaling, bigger yards, etc. Each day dozens of trains plow the 2200-mile Chicago-LA “Transcon” on BNSK (Burlington Northern Santa Fe). Hundreds of freight trains come in and out of Atlanta each week (the busiest traffic generally running from northwest to southeast, from the Midwest to Florida). Norfolk Southern has spent lots of dough improving their line from Norfolk/Hampton Roads to the Midwest (through the mountains of Virginia and West Virginia), and is doing the same on its line that parallels the increasingly truck-congested (and dangerous) Interstate 81 corridor that runs through the western part of VA/Shenandoah Valley (that corridor the scene of occasional—and deadly—truck/car accidents dues to the sometimes steep-grades, as in trucks careening downhill at 80 mph and struggling uphill at 45 on the up and down terrain). I suspect most drivers would not might if more trucks were diverted to rail (intermodal), although there are limits to that as many truckers are not going cross-country—important in the sense that rail is more effective and practical over longer distances.

    Finally, on the passenger train/freight train debate: Amtrak usage has been growing in recent years, but there are trade-offs to expanding passenger rail in freight-heavy rail corridors. In other words, more passenger trains (without improvements such as better or additional track and signaling) might mean fewer freight trains—and more 18-wheelers on our roads. That is probably the prime reason there is no direct Amtrak service from Chicago to Miami (via Nashville, Chattanooga, Atlanta, Macon). NS and CSX both have lines connecting Atlanta and Chattanooga, but both lines have lots of curves (and more importantly, lots of freight traffic), on mainly single-track line. The NS line to Chattanooga, running in the direction of Midwest, carries more freight than the NS line running northeast of Atlanta via Greenville, Charlotte and DC—so it is harder to run passenger trains on the former than the latter (even though the latter also has lots of single-track territory).

  4. Will Durant says:

    Thank you both for the correction and the information. I admit to firing from the hip with my disparagement of the freight system per my own experiences many years ago and believe it or not I’m happy that I’m wrong regarding the current rail freight situation. Can I assume that tax dollars are not subsidizing rail freight?

    I worked in IT for a steel company that pioneered in mini-mills primarily manufacturing reinforcing steel for concrete. Steel was manufactured into rebar from scrap in a mill in Tampa and shipped in straight lengths to fabricating plants originally by rail. Though it was somewhat cheaper to ship 100 tons per rail car vs 20 tons per truck the lack of reliability in delivery times drove the company to lease their own fleet of trucks. This was considered more economical even though they were mostly dead heading back to Tampa because not meeting deliverables carried heavy penalties. The company was sold to an international and I helped setup a mill in Germany and the cliché was true, their trains ran on time and more importantly your steel wasn’t left on a siding somewhere in East Bumble. Almost no trucking was used though they did use barges.

    My concern that I’ve seen touched on this site regarding the expansion of the Savannah River port and its effects on Georgia highways when it seems like a natural that the bulk of that traffic should be rail. And yes my disparagement of rail here was colored by the excellent passenger rail service in Europe. My disparagement of subsidizing trucking is in part due to the experience in the rebar industry with my company bidding on GDOT bridge contracts for bridges destroyed by overloaded pulp wood trucks for roads that, I kid you not, had an ADT (average daily traffic) vehicle count of 250 or less.

  5. John Walraven says:

    Congressman Graves is someone I count as a friend and a man whose heart is in the right place whether or not you agree with his decisions on politics or policy. My issue with this bill is whether or not the states would follow through in accordance with this excerpt from the post:

    “The bill probably wouldn’t affect how much you pay at the pump, because it’s expected that states would raise their gas taxes by the same amount the federal government reduces its tax.”

    In the political environment that we are currently in I cannot imagine a bill gaining passage in the General Assembly to increase the motor fuel tax. Motor fuel is exempt from taxation in the regional transportation taxes currently being levied in the three regions that passed the referendum.

    Could this be a flaw in the policy? A shift of the political risk in increasing taxes from Congress to the Statehouses? Does anyone else think that the myriad of groups that oppose any policy that results in revenue for government would lay down or support a tax increase? Even if you could prove that the state increase would create a “wash” at the pump, I’m skeptical that the non-lobbyists in the Capitol that spend forty days advocating for or against such legislation would allow for the debate to move forward with a “revenue-neutral” assessment.

  6. northside101 says:

    Will, no that would be incorrect (in terms of assumption that tax dollars are not subsidizing rail freight). Some rail infrastructure projects can be so expensive that public assistance is provided, but with the justification that it is cheaper to, say, provide Norfolk Southern in Virginia the dough to improve their Shenandoah Valley line (which as I noted yesterday parallels truck-heavy I-81) than spend countless more dollars to widen all of that long (300+ miles in that state) hilly highway—a project which the state would not be able to fund right now anyway (billions, anyone?). That was the basic argument made by NS in getting that project done (which by the way was recently profiled in Trains Magazine). Virginia also has spent money helping to upgrade the freight and passenger-train heavy CSX line that connects Richmond and Washington along very busy I-95. 95 is so bad between those two cities, one time it took me four hours just to cover that distance, which is only about 100 miles—like going from Atlanta to Columbus. Only so much money to go around and space to widen roads like that.

    Los Angeles, our busiest port (at least in terms of intermodal) recently saw completion of a rail project in that area which eliminated lots of railroad crossings (submerged a busy line mostly below ground), partially funded with public funds but also eliminating safety hazards and backups when dozens of trains a day ply back and forth through there.

    I suspect more locally, the KIA plant in West Point got some assistance from the state for a rail spur to connect with the Atlanta-Montgomery CSX line. While auto plants like to be located along or near interstate highways, rail access also is critical, as according to Trains Magazine, about 70 percent of autos made in America move at some point by rail.

    The trucking industry also has had its share of issues—driver shortages, gas prices, road congestion, fatigue—that has helped shift freight to rail. There is debate about truck safety, especially as pertains to truck weight, fatigue and mingling of tractor trailers and passenger vehicles on increasingly congested roads, issues taken up by such organizations as Road Safe America. But when it comes to short hauls—say a few hundred miles—hard to see how trucks would lose dominance over freight trains overall.

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