The Wonk Room

GAO Recommends Raising Gas Tax, Starting Congestion And Pollution Pricing

Today, Transportation Secretary Ray LaHood officially revealed how much money the administration thinks it needs to infuse into the Highway Trust Fund (HTF). Over the next 18 months, the Fund will run about $20 billion short, with $5-7 billion of that needed before October 1. “There are a lot of people putting their heads together right now on how to get $20 billion and how to pay for it,” LaHood said.

It’s great that the administration is trying to come up with a creative solution to the immediate problem. Letting projects funded by the Trust (which are separate from those funded by the economic recovery package) would be a blast of anti-stimulus right when we don’t need one. But as I’ve noted before, we’re going to have to keep coming up with creative ways to keep the fund solvent unless we change the way in which it raises revenue. But don’t just take my word for it. Here’s the Government Accountability Office (GAO), in a report sent to Congress today:

While infusing more money into the HTF would help keep the Highway Account solvent, such action would not ensure the long-term sustainability of the HTF nor address the need for improved performance of our nation’s surface transportation programs. We have previously reported that current surface transportation programs—authorized in SAFETEA-LU—do not effectively address the transportation challenges the nation faces. As a result, we have called for a fundamental reexamination of the nation’s surface transportation programs

The problem here is that the HTF is overwhelmingly funded by gas taxes, of which we keep collecting less and less.

The GAO endorses a few solutions which make complete sense to me. First, raise the gas tax and index it to inflation (the tax hasn’t moved since 1993, despite inflation and an effort to fund more transport projects). Second, finding new sources of revenue through congestion and pollution pricing. Of course, the administration seems adamantly opposed to raising the gas tax — and Congress can’t even stomach someone bringing up the idea — but until some serious steps are taken we’re going to be right back here, with an insolvent Trust Fund, time and time again.