Some of North Carolina’s, and other states’, highway headaches could be soothed relatively quickly if revolutionary legislation recently introduced in Congress were to become law.
The name of the bill, sponsored by Rep. Jeff Flake, R-Ariz., is the Transportation Empowerment Act (H.R. 3113). It would reverse an unfair funding formula whereby the federal government collects 18.4 cents a gallon on gasoline and other fuels and then distributes the accumulated revenue each year to the states as Washington sees fit. States also tack their own fuel taxes atop the federal levy. North Carolina adds a tax of 24.3 cents a gallon.
The problem is that there is wide disparity, geographically, in the distribution of the revenue. Southern and Western states, year after year, generally receive much less than the amount they pay in fuel taxes to the federal government. On the other hand, states in the northeast and central U.S. generally get much more than what they pay.
Then, too, the nation’s transportation problems have become increasingly local and regional in nature. In North Carolina, a rapidly deteriorating Interstate 95 and the decay of other major highways and bridges quickly come to mind. Federal officials have little to offer in the way of effective solutions to the crumbling of the states’ infrastructure.
Flake’s bill would allow states to collect all of the taxes and keep their full portion of the revenue. Then the states could spend the revenue on transportation priorities of their own choosing — not Washington’s. Billions of dollars, and a healthy measure of independence, are at stake.
North Carolina alone stands to gain at least $300 million a year, based on an annual average the state paid in federal gas taxes from 1995 to 2000. That’s because North Carolina gets back only 64 cents of every dollar paid to the feds, according to N.C. State University economist Michael Walden. Other fast-growing states in the South — Alabama, Mississippi, Georgia, Virginia, Florida, Tennessee, South Carolina, Kentucky, Texas, and Louisiana — also are “donor” states.
States in the Northeast, many of which rely heavily on transit, make a killing off the current federal apportionment. New Jersey, Rhode Island, Connecticut, New York, and Massachusetts all receive $1.50 to $2.80 in federal transit spending for every dollar they pay in federal gas taxes, Walden reported.
Another major problem with the existing federal program, according to Dr. Ronald D. Utt, writing for the nonprofit Heritage Foundation’s Backgrounder, is the mandated diversion of as much as 40 percent of federal fuels-tax revenues to nongeneral purpose highway projects that benefit small but influential fractions of the population. Members of Congress inserted into the 1998 legislation, the Transportation Equity Act, many of the thousands of pork-barrel projects that waste billions of dollars.
The largest diversion of all is the federal transit program that shifts a disproportionate share of the federal transportation money (20 percent) from roads to transit systems that carry only a small portion (1.8 percent) of the traveling public. In North Carolina, Gov. Mike Easley began diverting some state highway funding to mass-transit projects in 2003.
Under current law, 2.86 cents of the federal tax goes into the Mass Transit Account — which means that motorists across the nation provide the same subsidy for transit even though the availability and usage of transit services vary dramatically from place to place and are largely concentrated in just a few major metropolitan areas, Utt says. Seventy-four percent of transit ridership occurs within seven metropolitan areas — New York, Chicago, Philadelphia, Boston, San Francisco, Los Angeles, and Washington, D.C. New York alone accounts for 42 percent of America’s total transit ridership.
Flake’s proposal would allow each state to adjust its spending patterns and subsidies to conform more closely to the prevailing ridership preferences of its taxpaying citizens. In North Carolina, ever-worsening congestion on major highways dictates that the money go toward construction of new roads, not toward mass transit.
The expiration of TEA-21 on Sept. 30, 2003, presented Congress with a once-in-a-decade opportunity to reform the federal highway and transit program in a way that would give greater responsibility and decision-making to the states and metropolitan areas. The Transportation Empowerment Act — which would give motorists greater mobility without increasing taxes — is a good place to start.
By then, hopefully, North Carolina’s leaders will gain the wisdom to put gas-tax money to work on the state’s highways, where the money belongs.