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Offsetting: A Third Strategy to Fund Federal Transportation Spending

"What program would you cut to continue the same level of transportation spending without raising the gas tax, e.g. cancer treatment programs, Head Start?," asks Streetsblog USA's Tanya Snyder after reading Sen. Bob Corker's (R-Tenn.) recommendation.
May 29, 2014, 7am PDT | Irvin Dawid
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Sen. Bob Corker, who sits on the powerful Banking, Housing, and Urban Affairs, one of three committees responsible for measures to be included in the MAP-21 Reauthorization Act, sent a letter [PDF] on May 14 to the heads of the other two Senate committees: Environment and Public Works Committee and the Finance Committee, which at first glance might seem that he advocated increasing the federal gas tax to provide the necessary funds to fill the Highway Trust Fund shortfall, the difference between spending and gas tax receipts. 

In the last few years, Congress has allowed the [Highway Trust Fund] to become one of the largest budget gimmicks in the federal government. Spending from the HTF has far outpaced [gas tax] revenues in recent years, taking us away from our traditional user fee, pay-as-you-go transportation financing model. Instead of enacting a permanent solution to this problem, we have transferred more than $50 billion of general fund money [$54 billion according to this NPR report] to maintain funding levels.

Corker's press release, which includes his letter, is even more direct, calling for "reestablishing (the) self-sustaining highway program" in the title.

He gets it! If you stopped reading there, you'd be very pleased that a senator is saying what we all know, that the "permanent solution", at least for this go-around of the transportation reauthorization act, is to bring the trust fund into solvency sticking to the "traditional user fee, pay-as-you-go transportation financing model."

Snyder takes it from here:

Then he lays out two options for solving the problem: “(1) increasing dedicated HTF user fees to match spending levels, or (2) reducing HTF spending to match dedicated HTF revenues.” He quickly dispenses with the first: “It is my belief that reducing spending to current HTF revenue levels would be damaging to our nation’s infrastructure, competitiveness, and economic growth.” Good show, Senator! So that leaves us with increasing the user fee, correct?

Not so fast. “Another alternative that would at least make Congress accountable for the increased spending is to offset HTF spending that exceeds revenues by reducing other government spending by an equal amount,” he wrote.

The "third strategy", off-setting the general fund transfers [see his press release], does nothing to restore the user-pay system that the Highway Trust Fund is based on. Snyder suggests that the Corker strategy would result in "lawmakers end(ing) up cutting cancer treatment programs and Head Start and meals on wheels. All to make sure drivers don’t have to pay their own way."

Seems like another gimmick to me.

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Published on Tuesday, May 20, 2014 in Streetsblog USA
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