The road to reform

It’s hardly surprising that a proposal to triple the federal motor fuels tax would draw attention. For a motoring public already paying more than $3 a gallon on average for gasoline, raising the 18.3-cent federal tax by 25 to 40 cents over the next five years might sound like adding insult to injury. But that is what the National Surface Transportation Policy and Revenue Study Commission ( proposed in a report to Congress last month.

In our “sound bite” culture, the story for most Americans undoubtedly ends at tax increases. Yes, the news reports mentioned the crises of crumbling infrastructure and paralyzing congestion. But sadly and understandably, Americans have grown cynical about the ability of anyone to fix major problems like these. They see government as inept and the private sector as greedy. Spending more money just wastes more money.

But that’s precisely the commission’s point. Most of the commission’s recommendations relate not to raising money but rather to reforming programs and institutions to reduce or eliminate roadblocks to allocating that money wisely. Essentially, the panel would throw out today’s federal highway program and start over. Its recommendations include steps to:

  • Accelerate the time between conception and delivery of major transportation projects through reforms in environmental approval and similar processes;
  • Replace more than 100 current transportation programs with 10 outcome-driven programs focused on recognized national priorities, including increasing capacity for freight transportation and reducing congestion; and
  • Create a National Surface Transportation Commission to develop national strategic plans for each of the program areas and adopt a mechanism to fund the federal share, subject to a congressional veto.

Aside from the tax increase, Transportation Secretary Mary Peters faulted the majority recommendations of the commission she chaired in part because it retains national management of infrastructure decisions. She believes states should have greater flexibility to pursue solutions, including private-sector investment. Peters’ preference for state priorities and financing flexibility rests on two bedrock anti-Washington principles: That local decisions are better than federal ones, and that the private sector is better than government. It ain’t necessarily so – at least not with respect to the national highway system.

A national government exists because certain national priorities transcend and trump state and local priorities. The safe and efficient flow of people and goods throughout the country is one of those national priorities. State and local governments aren’t directly accountable to the individuals and companies who must use roads in one state in order to travel between two others.

Nor would the private sector inherently deliver a better value to highway users. Private developers are motivated by revenues and profits, not efficient commerce. True, the financial incentive may add an element of urgency to project completion that’s harder to achieve in a government-run effort. But the profits of private-sector developers – as well as the fees and debt paid to banks to finance deals – essentially represent an additional cost to highway users. Another big argument is that privatization frees up money that could be used on other highway projects. Fair enough, but you are then back to the question of who decides how those funds are to be invested.

The focus on tax increases and these other issues could overshadow the commission’s important contribution. It would be a shame if its report goes straight to lawmakers’ bookshelves to gather dust. Even if Congress doesn’t spend a dime more on highways, the commission’s proposed reforms in how roads are built and used would help people and freight move more efficiently.