|
Summary
More money for transportation in
Virginia is unnecessary. A congressional delegation that
sets priorities and places the interests of Virginians
first is what we lack.
Main text word count: 838
Between 1992 and 1996, Virginia
received only an eighty-three percent share of what it
paid into the highway trust fund, while Massachusetts
got back two and a half times its contribution…. All
the states in the northeast, however, received paybacks
exceeding the fuel taxes they paid.
Perhaps a more useful endeavor
for Senator John Warner would be to restore to Virginia
its fair share of the federal money, rather than promote
an increase in a regressive tax to compensate for his
inaction on a problem that has existed for much of his
twenty-four years in the U.S. Senate.
Attention Virginia Viewpoint commentaries are provided
for reprint in newspapers and other publications.
Authors are available for print or broadcast interviews.
Electronic text is available at www.VirginiaInstitute.org
or on disk. Please contact:
John Taylor Phone: (703) 421-8635 August 2002 · No. 2002-19 Virginia's Transportation Needs
Shortchanged by Flawed Federal Program
By Ronald D. Utt, Ph.D.
Escalating levels of road use now make traffic
congestion in the Washington area third worst in the nation. How
to address the problem has been a source of debate for years.
The solution now recommended by many state officials and the
business community is a half a percent increase in the sales tax
in northern Virginia, and a full percent increase in Hampton
Roads to fund more road and rail projects. On November 5,
residents in both locations will vote for or against the
increase. Both sides are gearing up for a fight between now and
then.
Before frustrated Virginia commuters commit themselves to
higher taxes, they might want to have their elected officials
take a closer look at how the federal highway program mistreats
the Old Dominion. Doing so will reveal opportunities for
fundamental reform that can send substantially more federal
highway money to Virginia at current tax rates. One
promising reform - called "turn back" - would devolve
the federal program to the states by allowing each to keep the
federal fuel tax revenues raised within their borders rather
than sending them to Washington. If enacted, this reform would
guarantee that federal fuel taxes paid by Virginia drivers will
no longer subsidize motorists in the wealthy states of the
North, or the special interests that divert fuel taxes to other
purposes.
For the most part, the predominant share of public spending
for roads and transit comes from the fuel tax motorists pay
every time they fill their tank with gasoline. In Virginia the
price of each gallon of gas includes a state fuel tax of 17.5
cents and a federal fuel tax of 18.4 cents. The Virginia tax
stays in the commonwealth for local transportation purposes, but
the federal tax first goes to Washington before a portion is
returned to the state. In the case of Virginia as well as
twenty-nine other mostly southern states, the amount of money
returned in 2000 was less than the taxes paid. The other twenty
states, mostly in the North and West, got more back than they
paid in.
Between 1992 and 1996, Virginia received only an eighty-three
percent share of what it paid into the highway trust fund, while
Massachusetts got back two and a half times its contribution.
Several other southern states fared even worse than Virginia,
receiving less than eighty percent of their contribution. All
the states in the northeast, however, received paybacks
exceeding the fuel taxes they paid.
Although federal legislation passed in 1998 was supposed to
lessen these disparities, the effort fell short, and southern
states still subsidize highway spending in the North. In 2000,
Virginia received back only eighty-nine percent of its
contribution to the program, and the missing eleven percent was
a costly loss. Had Virginia received back as much as it paid in
that year, it would have had an extra $95 million dollars for
roads, and an extra $80 million in 1999. With annual
deficiencies like this stretching back over the past decade, is
it any wonder our roads are so inadequate?
Obviously, a more equitable program would eliminate much of
the need for an increase in the sales tax. Given how poorly
Virginia fares under the federal law, perhaps a more useful
endeavor for Senator John Warner would be to restore to Virginia
its fair share of the federal money, rather than promote an
increase in a regressive tax to compensate for his inaction on a
problem that has existed for much of his twenty-four years in
the U.S. Senate.
A second congestion-causing flaw in the federal program that
burdens Virginia is the diversion of the federal fuel tax
revenues to purposes other than roads. When the trust fund was
created in 1956, all federal fuel taxes were spent on the
interstate highway system, but by the early 1980s as the system
neared completion, the federal fuel tax was increased with more
and more of it siphoned off into non-highway programs such as
mass transit and other uses of little value to motorists.
Although motorists contribute almost twenty percent of their
fuel taxes to transit programs, this diversion leads to even
greater regional inequities because seventy-five percent of
transit ridership occurs in just seven metropolitan areas. As a
result of these competing claims on the trust fund and the
diversion of federal highway money from the South to the North,
Virginia motorists are getting back as little as 58 cents in
general purpose highway money for every tax dollar they send to
Washington.
The enactment of turn back legislation will rectify this
persistent inequity and allow each state to spend its gas tax
revenues on the transportation priorities of its own choosing,
not Washington's.
It also allows states to do so unencumbered by costly federal
regulations that try to force a one-size-fits-all program on a
diverse nation. And most importantly, the fast growing southern
and western states would keep their fair share of the funds, and
end the traffic congestion that past inequities, and Senators
asleep at the wheel, have helped create. #####
(Ronald D. Utt is the Herbert and Joyce Morgan Senior
Research Fellow at The Heritage Foundation, and an adjunct
scholar with the Virginia Institute for Public Policy, an
education and research organization headquartered in Potomac
Falls, Virginia. Permission to reprint in whole or in part is
hereby granted, provided the author and his affiliations are
cited.) |
