State officials and business executives are road-testing surprising new ideas to build the roads, bridges, tunnels and airports needed by millions of gridlocked Americans.
States, cities and counties “aren’t waiting for the cavalry to come,” but are working with each other, with companies and with voters to cooperatively build and repair the roadways used by more than 100 million Americans each day, said Robert Puentes, an expert at the Brookings Institution, a Washington, D.C.-based research center.
“Washington has proven itself incapable of leading on this [infrastructure] issue for the last couple of years,” he said. “There are a whole series of things happening outside the [D.C.] beltway that reflect a do-it-yourself attitude” by states and cities.
Most of the these new ideas ensure fees, tolls, and taxes paid by drivers are only used to build and repair roads for drivers, and are not diverted to fund trolley lines, bus routes and other projects favored by local politicians.
In contrast, the nation’s gas tax generates a little more than $40 billion a year that is often diverted away from drivers’ priorities. The tax proceeds from the federal gas tax are sent to state governments without any oversight to ensure the money is actually spent on projects that aid drivers.
“It’s basically close to a blank check … there’s no performance metric,” Puentes said.
“When you pay out of user fees, [maintenance] tend[s] to be well-managed,” said Randal O’Toole, a budget expert for the D.C.-based Cato Institute, which advocates for free-market policies. “When the politicians get involved in how the money is to be spent, they spend it on glitzy [new] projects that get their names into the paper.”
That’s why most Americans oppose increases in the national gas tax, said Rick Geddes, the director of infrastructure policy at Cornell University.
“It is much easier [for gas-tax] revenue to be diverted … [so] there is bipartisan opposition to an increase in the tax now,” he said.
It’s not just an aversion to higher taxes that keep infrastructure funding at insufficient levels. The federal government is spending more cash to non-infrastructure programs.
For example, since 1965, the fast-growing costs of Social Security, Medicare, Medicaid and various welfare programs have consumed a larger share of the federal budget. The Heritage Foundation notes mandatory spending — funding for welfare and entitlements — will consume 65 percent of federal spending in 2024, up from 27 percent in 1965.
However, Americans are sometimes willing to pay extra taxes for roads and railways if they know they’re getting a direct benefit, Geddes said.
It is “much better to pay directly [because the funds] are much less likely to be diverted” by politicians to other pet projects, he said. For example, in northern Virginia, companies widened the “Beltway” freeway south of Washington, D.C., in exchange for the right to charge tolls against the drivers who use the new express lanes.
The state government and taxpayers don’t face any risks because the company has to pay the road construction debt, he said. Drivers who are willing to pay the toll get a quick commute — and also slightly reduce the congestion on the main, government-built Beltway, he said.
“There is bipartisan opposition to an increase in the tax now”
But are these public-private partnerships really ideal for taxpayers? Americans are justifiably skeptical about cooperation between governments and companies. And, there is good reason to worry that high-dollar deals can be devised to help politicians and executives, and to transfer hidden costs to Americans.
Still, the new transport deals are far more open than the usual closed-door deals between politicians, construction companies and local labor unions, where they decide how to spend federal gas-tax funds, Puentes said.
“Most of these [new] deals are highly transparent, and there’s much more direct engagement with the general public than with a traditional infrastructure project,” he said.
The new deals often have to be approved by voters and local political debates by groups on opposing sides of the deals.
That public process is playing out in Oregon, where the state is developing a “OneGo” plan to replace the state’s 30-cents per-gallon gas tax with a 1.5-cents per-mile tax. Starting July 1, the plan will be tested by 5,000 volunteers who will carry high-tech mile-counting devices in their cars. The switch to pay-per-mile taxes would increase the state’s revenue, but it also would ensure the extra taxes are spent on roads.
“I think it is a great idea,” said Cato’s O’Toole, who lives in Oregon and is one of the 5,000 volunteers testing the per-mile system.
The Oregon plan is fair because it levels the taxes paid by wealthy people and poor people, said Geddes. Wealthy people can buy expensive electric cars and newer fuel-efficient cars, which generate relatively little in gas taxes. In contrast, poorer people tend to drive older cars that consume more gasoline.
In fact, environmentalist groups are objecting to the plan because it would end the gas-tax advantage given to the wealthy owners of electric vehicles.
O’Toole isn’t sympathetic to the drivers of high-mileage electric autos.
“They already get a break because they’re buying less gasoline … that’s how they’re saving money,” he said.
Other problems with the mileage tax can be resolved by laws and regulations modifications, Geddes said. For example, people in rural areas may pay a higher bill because they have to drive longer distances than people in urban areas. That problem can be solved by rules that rebate some funding to rural families, he said.
Some privacy groups worry the plan would allow the state to monitor people’s driving habits through the high-tech mileage meters. State legislators solved that problem by allowing drivers to use high-tech drivers meters that ignore locations while they calculate distance, just as odometers on autos, Geddes said.
The mile-counting devices are being built and run by Sanef ITS Technologies America Inc. in New York, and Intelligent Mechatronic Systems Inc. in Ontario, Canada.
State governments in California, Washington state and Indiana are eyeing a similar mileage taxes.
The new ideas are offering a route around the Washington, D.C.’s political gridlock, if Congress and the president will only follow the new directions.
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