America’s creaking roads and bridges may be less congested as penny-pinching drivers cut back, but there’s a downside, too – the stay-at-home motorists are starving the system of cash. The Highway Trust Fund, set up in 1956, awaits an emergency infusion of $8bn to avoid running out of money this month. It is supported by per-gallon taxes on motor fuels, but miles driven are down almost 5 per cent versus a year ago and the switch to more efficient cars has also cut fuel consumption.
The underlying problem is that taxing motor fuel by volume is a flawed means of financing road projects that get more expensive over time. A more insidious drag, however, is pork-barrel politics. Highway spending is the largest source of cash for congressional earmarks, through which politicians direct money towards their own constituencies. In 2006, for example, 15.5 per cent of the Federal Highway Administration’s appropriation or $5.7bn was diverted to 6,556 pet projects such as museums, bike paths and lighthouse repairs.
The current formula for highway funding expires next September so the new occupant of the White House will have to fix the mess. Republican candidate John McCain is an outspoken critic of earmarks, though his ill-considered proposal for a “gas tax holiday” would have emptied the fund’s coffers even sooner. Conversely, his running mate is a veritable poster child for pork, securing almost $27m in earmarks for tiny Wasilla, Alaska, when mayor, or more than $4,000 per resident. She also defended an infamous $400m “bridge to nowhere” while running for governor.
A short-term fix for the fund’s finances might be to ask state and local governments to chip in a higher percentage of project costs – they now pay only 10 to 20 per cent. The more simple and effective solution would be to raise fuel taxes, far lower than in most developed countries. Sadly, any politician suggesting this would be roadkill.
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