Congress is currently debating reauthorization of the federal surface transportation program, something it does every six years or so. In response to concerns that the federal government is too large and intrusive, many fiscal conservatives, led by Senator Jim DeMint and Representative Jeff Flake, support devolving both the program and the federal fuel taxes that support it to the states. After all, the states own and operate the vast majority of all highways, but accepting federal funds for them has entangled the states in numerous costly federal requirements.
Two reauthorizations ago, devolution enjoyed a surge of popularity, in 1997 and 1998. Half a dozen governors and their transportation departments supported a measure proposed by Senator Connie Mack and Representative John Kasich to devolve nearly the entire highway and transit program, including most of the federal gas tax, to the states. Mack and Kasich argued persuasively that, as Mack put it, “states now have the technical capability to build their own roads, and, frankly, they know better than Washington what their transportation needs are.” Mack and Kasich proposed only a skeleton federal program to maintain the existing Interstate system and roadways on federally owned lands, supported by a federal gas tax of only a few cents per gallon (far below the current 18.4 cents a gallon).
I was an enthusiastic supporter of Mack-Kasich then, both as a member of California’s Commission on Transportation Investment (which endorsed it) and as a transportation policy researcher. In a 1996 Reason Foundation policy paper, I laid out a case for devolution, arguing that federal mandates (Davis-Bacon, Buy America, etc.) meant that federal highway dollars were worth only 73 percent of what unencumbered state dollars could buy, that the feds were diverting an ever-increasing share of highway user tax money to non-highway programs (such as mass transit and bike paths), and that Congress mandated that a lot of the money be wasted on pork-barrel projects.
Those points are even more valid today. Earmarks soared to unprecedented levels in the 2005 reauthorization, and nearly a quarter of all federal highway user-tax revenue is now spent on non-highway purposes. The Obama administration’s proposed reauthorization measure would double the size of the federal program and fund high-speed rail and an “infrastructure bank” out of the Highway Trust Fund, which it would rename the Transportation Trust Fund. Even within the highway portion of this trust fund, $27.5 billion would be diverted to a new “Livable Communities” program.
While I am strongly opposed to the administration’s proposal, I no longer support the drastic form of devolution represented by Mack-Kasich and still embraced by DeMint and Flake. The main reason for my change of mind concerns the Interstate highway system. In a one-on-one meeting with a pro-devolution member of Congress last year, I made the case that the Interstate highway system is inherently federal and should remain funded at the federal level of government, while agreeing with him that all the rest should be devolved. “How much federal tax would it take to support that?” he asked, adding that he guessed 2 or 3 cents a gallon. He was shocked when I replied that to rebuild and modernize the Interstate system would likely take the entire 18.4 cents a gallon gas tax and possibly more.
What Fiscal Conservatives Miss about Major Highways
There are three principal reasons for the disconnect between reality and much conservative thinking about Interstate highways. First, highways wear out. Major highways, such as urban freeways and our long-distance Interstates, are designed for a useful life of about 50 years, even with reasonably good maintenance. After that, they need to be rebuilt, from the sub-pavement base on up. And when such a road is reconstructed, it makes sense to upgrade its design to current standards, instead of the accepted practices of 50 years before. For example, many of the early freeways were designed with left-side exits at major interchanges, a practice now seen as creating safety hazards. The Interstate highway program began in 1956, with the initial segments opening in the late ’50s and early ’60s. That means large portions of the system will reach their 50th anniversary this decade and next. And that will mean major reconstruction projects, carried out at today’s high construction costs.
