How to start fixing transportation

Moderated by Tom Sabulis

When will we finally get realistic about our transportation needs on the federal and state levels? Today, two local experts take a crack at putting the diminished Federal Highway Trust Fund and gas tax into perspective. The transit leader says its time to fix the balance between road and transit funding, while Libertarian policy analysts bang the drum for that old favorite — user fees charged to motorists: The more miles you drive, the more tax you pay.

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Put transit back in mix

By Lee Biola

America’s long detour away from walkable communities may soon end. The Federal Highway Trust Fund is in trouble. No one seems willing to pay to save it. Depending on how we handle this, we could be better off or worse off.

America has a long history of government-funded infrastructure. British taxpayers underwrote the development of our first ports. Our Founding Fathers built canals. Here in 19th century Georgia, a government rail line gave rise to a little settlement that became Atlanta.

In the early 1900s, government subsidies turned from rail to roads. Atlanta taxed streetcar lines to pave streets. Georgia passed a state-aid highway law in 1908 and began collecting a one cent gas tax in 1921 that rose to six cents per gallon by 1930. Nationwide, the various states’ gas tax collections went from $1 million in 1919 to over $1 billion in 1946. America’s “love affair with the automobile” was not cheap.

Before World War II, road subsidies were not enough to run most private rail operators out of business. Cities’ rail-oriented development fit with the rails like a hand in a glove. Most neighborhoods had grown up near train stations or electric streetcar rail lines. Rail-oriented American small towns and cities preserved the walkability cities had known for thousands of years.

After World War II, planners rewrote standard local zoning codes to force private businesses to provide free parking. New codes required builders to set buildings back from the street behind giant surface parking lots. Counties and cities across the country adopted these “model” codes, which decimated downtowns large and small. But to really make the automobile viable, we needed to spend tax dollars — a lot of tax dollars.

Enter the Highway Trust Fund. Before 1956, the federal gas tax had gone through the general budget and not all of it went to roads. In 1956, the federal government put gas tax proceeds in a “lock box” dedicated entirely to roads, with no gas tax proceeds dedicated to mass transit.

Privately owned mass transit systems, already suffering from the loss of streetcars, began to die off. Most privately owned intercity trains stopped running in 1971, and their assets were transferred to an underfunded Amtrak. Georgia passed a constitutional amendment in 1965 to allow five counties to raise a one cent sales tax for MARTA. In 1971, voters in two of those counties, Fulton and DeKalb, voted for the tax to keep buses running and build a new rail system.

In 1983, the federal government raised the gas tax to 8 cents a gallon for roads, but dedicated only 1 cent per gallon to mass transit. Road building exploded. Georgia’s urban interstates more than doubled from 1,244 lane miles in 1980 to 2,786 lane miles in 1995. MARTA rail, built over almost the same time period, is only 96 miles.

Just as development followed streetcar lines in the 1890s, it followed highways and other roads after World War II. The federal road-building push in 1956 followed the 1954 Supreme Court decision outlawing segregation. As fearful white families fled integrated schools, developers were happy to sell them houses near highway off-ramps.

In the 1980s and ’90s, people of all races were moving further out. The economics made it hard not to. But cities like New York, Boston and Chicago preserved their rail transit through either brilliance or inertia, and saw redevelopment of their core. Cities that started new transit systems like San Francisco, Washington and Atlanta also saw redevelopment.

Most tall buildings in Atlanta are near MARTA stations. Atlanta’s skyline follows the MARTA tracks. For the first 20 or so years of rail service, MARTA-oriented development was commercial. Since the early 2000s, it has been residential as well. A tall thin line of skyscrapers is what our city looks like from a distance. You can reach any part of that skyline on a MARTA train.

It is tempting to let the highway house of cards fall. We could just let everyone “move to MARTA.” That would certainly be a free-market solution. But much of our economy is tied to the freeways, and losing them suddenly would be a shock. Our federal government should properly fund Amtrak, correct the imbalance in road versus transit funding, and give communities time to transition gradually back to a more balanced and sustainable system.

Lee Biola, an Atlanta attorney, is chairman of Citizens for Progressive Transit.

User fees should fund our highways

By Baruch Feigenbaum and Joseph Fichthorn

As cars get more fuel-efficient and politicians redirect gas taxes to non-transportation projects, highways run out of money.

When it comes to finding a reliable revenue stream for the nation’s highways, Congress recently kicked the can down the road. Again. The latest $10.8 billion stopgap funds the nation’s highways until next spring. But sooner or later, Congress will have to tackle the long-term transportation issues facing the nation.

The most common thing you’ll hear about the Federal Highway Trust Fund is that we just need to raise the gas tax and index it to inflation. However, with hybrid and electric vehicles gaining market share, the current gas tax model simply isn’t going to be sustainable in the future. Tomorrow’s cars will go farther on less gas, diminishing the gas tax’s ability to repair and expand the nation’s roads.

The fairest way to fund the nation’s highways is to charge the drivers who use them. And Congress should consider refocusing the Highway Trust Fund on its original purpose, funding the Interstate highway system.

Established in 1956, the trust fund was sold to the public as a way to build and maintain the Interstate highway system. In 1983, however, Congress and President Ronald Reagan reneged on this promise, agreeing to siphon funds from highways into a mass transit account as part of a deal that raised fuel taxes.

The mass transit account now directly receives about 18 cents of every dollar in gas tax revenue. Further, states are allowed to flex parts of their highway funds into programs that have nothing to do with transportation. Federal fuel taxes now pay for recreational hiking trails, invasive weed removal and other non-highway infrastructure.

Clearly, Congress has abandoned the “user pays, user benefits” model that originally characterized the Highway Trust Fund. To supplement all these additional expenses, Congress has had to shift more than $65 billion from the general fund to the trust fund since 2008.

The best way forward is a model that charges drivers on how far they travel. Drivers with short commutes should not be subsidizing those who drive 100 miles or more per day. Replacing fuel taxes with true user fees, such as mileage-based user fees, will certainly take political will, but it has worked in Oregon.

Oregon created a permanent mileage-based user fee program for 5,000 drivers. The program is revenue neutral. It is not a tax increase. Participating motorists are refunded all gasoline taxes. Users are charged 1.5 cents per mile, which is around the same amount the average driver would pay in gas taxes.

The state offers three options. The first option uses a GPS-like device to record miles and notes when and where the driver travels. For drivers not comfortable with this technology, the second option is an annual odometer reading. This option calculates the number of miles driven, but not where the driver traveled. For those not comfortable with the second option, the third option allows participants to pay a flat monthly fee, without any monitoring of miles driven.

Most folks who use mileage-recording devices have liked the experience. A study by the University of Iowa found that out of 2,561 participants told to install mileage-recording devices in their vehicles, 71 percent held positive views of the user fees by the end of the study.

Several countries, including New Zealand, Germany and Switzerland, charge road users per-mile fees instead of per-gallon taxes. By charging vehicles according to the road wear they create, mileage-based user fees can render existing highways virtually self-sufficient.

Next May, members of Congress will again be forced to confront the fact the nation’s funding model for highways is unsustainable. Hopefully, by then they’ll recognize it is time to start eliminating the gas tax and replacing it with a system that charges drivers directly for the amount of driving they do — and that all of those fees must be put back into maintaining and expanding the highway system.

Baruch Feigenbaum is an Atlanta-based transportation policy analyst. Joseph Fichthorn is a transportation intern at Reason Foundation, a libertarian think tank online at

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