It’s time to end Uncle Sam’s gas tax shell game

Filed under: Contributed Columns |

Between 1956 and 1991, Colorado motorists willingly paid “temporary” hikes in the federal gasoline tax knowing that the money was being used to build the 42,000 mile interstate highway system. During 1991, Congress declared the highway system completed — but the tax lived on and on, growing bigger and bigger.
No longer needed to build the interstates, the current 18.4 cents per gallon federal gas tax — double what it was during 1990 — now supports a “highway trust fund” shell game that shifts about $498 million a year, and control over highways, from Colorado to Washington.
Here is how Colorado motorists would be better served by convincing Congress to repeal the obsolete federal gas tax and return control over highways to state and local governments.
State control. Road building is historically a responsibility of state and local officials who are in a better position than Uncle Sam to determine the transportation needs of their motorists. But, as long as Washington holds the purse strings, Colorado and the other states will be denied control over their own affairs.
If lawmakers in Denver could decide how much of the current federal tax should be added onto the state’s own 20.5 cents per gallon tax, the unified state gas tax could then be raised and lowered to reflect Colorado’s, not Washington’s, transportation priorities.
Misallocation of money. Compared to Washington, most states do a better job ensuring their gas taxes are actually used for highway improvements. Of the $602 million in state gas tax revenue collected by Colorado during 2006, all but $22 million (used for mass transit) was spent on state and local roads — a far better track record than Uncle Sam’s.
According to Ronald Utt, a senior research fellow at the Heritage Foundation, Washington annually doles out more than one-third of its gas tax revenues for non-highway projects such as air quality, traffic congestion, bicycle path projects and thousands of hometown pork projects sponsored by members of Congress.
Higher costs. Cycling the federal gas tax collected in Colorado to Washington and then back to Colorado also adds costly federal labor, environmental and other regulations — expensive hoops state road builders must jump through to get their money. And don’t forget that hundreds of millions of federal gas tax dollars are wasted each year paying for bureaucracies in Washington that duplicate the work of state highway bureaus.
Special interest clout. Centralizing the $33 billion in federal gas tax revenue flowing into Washington each year makes it easy for interest groups and lobbyists to concentrate their efforts and sway members of Congress to send money their way.
If that $33 billion was instead spent by 50 separate state legislatures, more money would go directly to serving the motorists who paid the taxes. It would be far more difficult for greedy interest groups and lobbyists to rip off money in the 50 state capitals, one state at a time.
In Washington, right off the top, 2.86 cents per gallon in gas tax revenue goes to mass transit projects. And perhaps the most outrageous raid on the federal gas tax occurred during the mid-1990s, when 6.8 cents per gallon was siphoned-off to pay down the federal budget deficit.
How much is enough? Back during 2003, the American Road Builders Association lobbied Congress to raise the gas tax by 12 cents per gallon. Then, during December 2007, the National Surface Transportation Policy and Revenue Study Commission, a creature of the U. S. Congress, recommended that the federal gas tax “… be increased from 5 to 8 cents per gallon per year over the next five years …” Each one-cent increase in the federal gas tax would, nationally, send another $1.9 billion to Washington.
As gasoline prices go up, similar efforts to raise the federal gas tax for the benefit of Washington-based groups, not Colorado motorists, might go up, too. As high gas prices cause Americans to cut back on their use of gasoline, federal gas tax revenue will fall. This, in turn, could create added pressure to raise the tax just to keep the money flowing into Washington.
What to do? Senator James Inhofe (R-Okla.), during 2003, offered a bill in Congress to return all but 2 cents (to cover federal maintenance responsibilities) of the 18.4-cent federal gas tax to the states. This bill, he said, would “Restore to states and local communities the ability to make their own transportation decisions without the interference of Washington.”
Colorado motorists don’t need a federal gas tax holiday this summer, as suggested by some would-be presidents. They need the obsolete federal tax repealed and control over highways returned to state and local officials.
Ronald Fraser Ph.D. writes about public policy issues for the DKT Liberty Project, a Washington-based civil liberties organization. He can be contacted at