Paying for Roads

Monday, September 15, 2008

ON THURSDAY, the House approved a bill that would infuse $8 billion into a trust fund that helps pay for America's highways, staving off its insolvency and averting layoffs of construction workers and delays of vital transit projects. The bailout was necessary, and Congress acted with justified speed. Though the $8 billion patch will add to the national debt, we're relieved that the Bush administration withdrew its shortsighted plan to transfer money from the mass transit account. Doing so would have imperiled the development of public transportation when many people are driving less for the first time in nearly 30 years. Still, the bailout is a temporary remedy that will keep the fund afloat for a year at most if projections hold. Congress needs to search for new sources of transportation funding or risk a similar crisis next fall.

Last October, the fund had an $8.1 billion surplus; this month Transportation Secretary Mary E. Peters announced that the fund's balance would reach zero by Oct. 1. What changed? As gas prices rose, Americans drove less, and gas tax revenue, which funds most transportation projects, declined. The instability of gas tax revenue underscores the conflicting logic driving transportation policy. Transportation officials encourage mass transit but rely on drivers to generate most of the fund's revenue. When drivers shift to buses and subways -- as they have this year -- revenue takes a hit, and an overburdened mass transit system is stretched to its limits.

Raising a federal gasoline tax that hasn't increased since 1993 and that has lost much of its power to inflation would be a good first step. But gas tax revenue will continue to decline as Americans shift to fuel-efficient cars. Congress must take a fresh approach; it can start by looking to Oregon, where a recent pilot program proved that charging commuters for the miles they drive instead of the gas they purchase can be successful. Roughly 300 Oregon motorists agreed to a per-mile fee that increased when they drove in congested areas or during rush hour. The result? Twenty-two percent of participants drove less during peak periods. Nine in 10 participants said that they preferred the mileage fee to the gas tax. The National Surface Transportation Policy and Revenue Study Commission recommended to Congress this year that the country transition to a mileage fee by 2025; the success of the Oregon program proves this is possible.

Unfortunately, neither Barack Obama nor John McCain has made transportation a priority or spelled out in any detail how to pay for it. Mr. Obama calls for "stronger" infrastructure and the development of high-speed freight and passenger rail. He says that he would ease congestion by giving states money to build bike lanes and pedestrian-friendly roads.

Mr. McCain would encourage automakers to develop fuel-efficient technology by issuing a "Clean Car Challenge" that would award a $5,000 tax credit to each consumer who buys a zero-emissions car. He would also increase penalties for automakers that don't comply with fuel economy standards, and he would offer a $300 million prize to anyone who can develop a car battery that surpasses current technology. He is right to focus on fuel efficiency and innovation, but his plan relies on implausible initiatives. His call for a gas tax holiday this year showed a misunderstanding of the fund's unstable finances.

Though their plans don't inspire confidence, we hope that the candidates learned from the Highway Trust Fund's near-collapse. The next administration must work with Congress to find sustainable, environmentally logical sources of transportation funding.

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