Highway Funding and the Transportation Empowerment Act

The incoming Congress will need to act fairly quickly on the federal Highway Trust Fund, which will run out of money sometime before the first of June. In theory, the Highway Trust Fund gets its money from the revenue generated by the federal gasoline tax, currently at 18.4 cents per gallon. In reality, though, more fuel efficient vehicles, the move to electric cars, and a tax unindexed to inflation has left insufficient revenues for the fund.

Washington’s response has been to top off the balance from the general fund, or more properly, by expanding the national debt. Georgia DOT officials estimate that for each dollar Georgians pay into the fund, they get $1.14 back.

How to fix the problem? Senator John Thune, who will lead that body’s transportation committee, is at least open to the possibility of raising the federal gas tax. In a Rome News Tribune story published on Sunday, 14th District Congressman Tom Graves said he has a better idea.

Graves wants that discussion to include his Transportation Empowerment Act — a proposal the congressman says would remove the federal government as a middleman and return transportation money back to the states that’s currently funneled through Washington, D.C.

Barry Loudermilk, who will be sworn in on Tuesday to represent the 11th District thinks the Highway Trust Fund has suffered from mission creep, noting its original purpose of funding roads and bridges.

“Over the years, though, we’ve broadened that to bike trails and green spaces,” Loudermilk said. “I love riding my bicycle, but bike paths don’t reduce congestion on I-75 south of Atlanta.”

Additionally, federal money comes with requirements such as studies and tests. Loudermilk said transportation dollars would go farther if the federal government reduces those regulations.

We’ve talked about the Transportation Empowerment Act before. It would provide for a gradual reduction in the federal gas tax that would be met with a matching increase in state gas taxes, staying revenue neutral. Its supporters argue that not only would this approach be more faithful to the concept of federalism, but it would save the states money by removing mandates that accompany the federal funds. Georgia could have had an additional $185 million to spend on roads in 2013, according to information cited by the AJC’s Kyle Wingfield.

It all sounds like a good idea on the surface. But, because Congress is using debt to supplement the trust fund, reducing the federal tax rate by the same amount it would be increased by the states would leave a shortfall.

The other question, and one that federal officials, including former Transportation Secretary Ray LaHood and House Transportation and Infrastructure Committee chair Bill Shuster have brought up, is a need to ensure a reliable transportation network across state lines. Here’s something to think about:

South Dakota’s 2014 population is estimated to be 853,175 people, roughly comparable to the 2014 population of Georgia’s Gwinnett County. Yet, South Dakota has 7,737 miles of state-owned highways, including 679 miles of Interstate highways, that the Highway Trust Fund would be expected to be used to pay for maintenance and construction. Gwinnett County, on the other hand, has “over 2750” miles of roads, according to the Gwinnett DOT website. Those roads include residential streets and county roads that wouldn’t have maintenance and construction paid for by federal funds.

If Graves’ Transportation Empowerment Act were to be passed, and assuming Gwinnettians pay roughly the same amount of gas tax as South Dakotans, they would each have the same amount of revenue to pay for vastly different road networks. Presently, the Highway Trust Fund is distributed in a way that largely evens this out. And that’s why Graves’ Transportation Empowerment Act may never be enacted.


  1. Harry says:

    Those who think rural transportation (South Dakota) should be subsidized, raise your hands.
    Those who think urban transportation (Gwinnett County) should be subsidized, raise your hands.
    Don’t tax you, don’t tax me, tax that fellow behind the tree.

    • Lawton Sack says:

      Do you not understand how critical roads are to our economy? That UPS, FedEx, the USPS, trucking companies, and other shipping companies actually use these roads to deliver goods both to and from manufacturers, suppliers, wholesalers, distributors, etc.? Roads are critical to public safety as well. I dislike paying taxes as much as the next man, but I sure like be able to have roads to get to work on, to make deliveries on, and to drive company vehicles on.

      I really don’t know if you are just trolling or if you really think that roads just magically appear. I wait, impatiently, for you to post some type of realistic solution to problem.

      • blakeage80 says:

        Good point, Lawton, but forget the economy at large, my Sunday Amazon delivery is at stake!

        Seriously though, what if the Federal Government just did away with the HTF and gas tax and maintained federal roads out of the general budget. No money gets passed back and forth. The extra needed to be allocated to roads could be cut from elsewhere in the bloated federal bureaucracy. A win for all taxpayers. Then states can raise their respective taxes and fund their own roads however they need to. I understand this is still a net loss of money for Georgia of about $.14/dollar minus the savings of not dealing with as many federal regulations, however, I’d pay for Georgia to be able to decide how it’s money is spent and it means less money borrowed at the federal level.

        • Jon Richards says:

          Do you really want to deal with the Federal Government being directly responsible for the maintenance of federal roads? It seems to be like that would be a bureaucratic nightmare that would greatly increase the costs, compared to the current method of delegating that to the states.

          The other question I would ask is how you would pay for it? You are claiming that cutting bloat elsewhere can do it, and I would believe you if we weren’t already spending money we don’t have.

          • blakeage80 says:

            OK, point taken on the feds actually doing road maintenance. To the point of paying for it from the general budget: Just wishful think I suppose. Wouldn’t it be nice if Congress had to make the case that the pie is only so big and transportation is a priority over ‘such-and-such’ program(s)? That could be a win for the party that pushes it.

            • Jon Richards says:

              It’s going to be difficult to convince people that transportation is more important than entitlements, such as Medicare, Medicaid and Social Security. That’s where the money is, especially at the funding levels needed if you dumped the gas tax.

              Besides, “The roads are already paid for.”

              • blakeage80 says:

                I hate politics. There’s never a way to do anything that doesn’t cause a problem with someone.

  2. Max Power says:

    If anything the federal gas tax should be raised, and all the states should raise theirs as well, especially in a time of falling gas prices.

  3. Rambler14 says:

    The gas tax in itself, whether it’s federal or state, is an archaic device which does not accurately tax the users of the infrastructure for its maintenance and operations.

    The sooner we can transition the entire country to a VMT system based on the individual’s driver behavior, the better.

    • Chamblee says:

      Or, we can just tax people based on their income according to belief that those who have more should give more to benefit their community. Then we can pool that money give it to a group of distinguished gentlemen and women. They will in turn, give the money to those who make the best/most equitable case for using the money according to usage statistics and a sense of fairness. They might even barter and horse trade with each other to make sure they each get what they want.

      That or use prisoners and illegal immigrants to build roads and bridges under supervision of unscrupulous contractors with personal ties to certain politicians and little if no regulation or oversight.

      Whichever costs me less, because taxes are bad.

  4. saltycracker says:

    Roads, not sidewalk, bike paths…..a use tax?
    Let’s start with schools as a use tax and if that works out expand it to roads !!
    Good public roads serve everyone and to develop a bureaucratic empire to tax every user will also create a pirate industry. We have fuel tax, license fees, toll roads and highway use tax on trucks to complement general funds.
    The entire tax code needs revision so everyone has reasonable skin in the game -sales plus flat or fair. But a use tax for the major funding for roads, but not other less used modes, give me a break.

    Btw the creep to bike paths, sidewalks……good for the public.

    • Jon Richards says:

      Um, Harry, that’s that this post was about. As I tried to make clear, there are some significant issues that will need to be resolved before Graves’ bill could become law.

      • Harry says:

        Your submission just puts transportation empowerment on the table only to dismiss it. Raising gas taxes will cripple an already fragile economy. Think outside the box and really consider what Graves etc. is proposing.

        The case of SpaceX is very instructive. Elon Musk uses what is called “first principles thinking”. Here’s what Business Insider says about it:

        While Musk admits that arguing from first principles “takes a lot more mental energy,” you can end up with novel or even groundbreaking results.

        The first-principles method was crucial for the start of SpaceX.

        When Musk and his team were trying to estimate how much the first SpaceX rockets would cost, they could have just looked at the products on the market. But as the blog 99u points out, his team didn’t settle for that analogy-based argument. Instead, they figured out what the necessary parts of a rocket were, and then found out how much the raw materials of those parts would cost.

        The result was startling: SpaceX could build a rocket for about 2% of the typical price.

        So much for conventional wisdom.

        In his interview with Rose, Musk provided another example:

        Someone could — and people do — say battery packs are really expensive and that’s just the way they will always be because that’s the way they have been in the past. They would say, “It’s going to cost $600 / kilowatt-hour. It’s not going to be much better than that in the future.”

        But first-principles thinking will not heed the pundits’ advice.

        Instead, you start asking fundamental questions. Musk continues:

        What are the material constituents of the batteries? What is the spot market value of the material constituents? It has carbon, nickel, aluminum, and some polymers for separation, and a steel can. Break that down on a materials basis, if we bought that on a London Metal Exchange, what would each of these things cost?

        Oh jeez, it’s $80 / kilowatt-hour. Clearly, you need to think of clever ways to take those materials and combine them into the shape of a battery cell, and you can have batteries that are much cheaper than anyone realizes.

        The takeaway: With first-principles thinking, you attack problems from a different angle, potentially making much better decisions.

        • Rambler14 says:

          “Raising gas taxes will cripple an already fragile economy.”

          Not raising gas taxes and watching jobs flock to Florida and Charlotte will cripple an already fragile economy.

          People have flocked to Metro Atlanta over the past 30 years. The state has lagged behind in providing adequate infrastructure to accomodate this growth. If the infrastructure is not built, growth will end.

  5. Will Durant says:

    To Harry and Rep. Graves with love,

    Everything is changing fast.
    We call it progress,
    But I just don’t know.
    And Grandpa, let’s wander back into the past,
    And paint me a picture of long ago.


    Make sure you zoom in to Georgia to see the old “Federal” roads we had. All were 2 lanes, most were paved, and most were patched. Atlanta to Miami could be done in two or three days. The secret for making it in two was to carry two spares.
    The Federal Interstate Highway System became successful with the 1956 installment of the federal gas tax. They have lost focus from the original mission in the past couple of decades and definitely could use some tweaking. Don’t throw the baby out with the bathwater. When gas prices are down 45 points I don’t think raising them a couple will cripple the economy.

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