November 14, 2019
By Vicki Kitchin
With the current federal highway authorization, known as the FAST Act, set to expire in 2020, there’s much debate about how to fund future road and bridge improvements across the nation. Should Congress increase the federal gas tax? Should the federal role simply diminish requiring states to implement new funding measures? Another idea is to move away from gas taxes, which are tied to the number of gallons used, and switch to road use charges, where each driver could pay according to distance traveled, system used, time of day and weight of vehicle. While much of the discussion is focused on new revenue ideas like these, it’s troubling that very little attention is focused on the spending side.
Did you know about 25 percent of the spending from the Federal Highway Trust fund goes to non-road uses? That’s nearly $11 billion every year that goes for things like bike paths, scenic trails, historic preservation, non-road portions of federal highway projects and transit systems. Some form of these diversions has been in place since 1982 at the federal level.
Indiana used to divert a significant amount of state-generated highway funds to non-road uses. Thankfully, our legislators recognized the issue and dealt with it. From 2013 to 2017, legislators enacted laws that ended the diversions of highway user taxes going to state police and bureau of motor vehicles. They also passed a law that eventually will move all sales tax collected on gasoline in the state to highway improvements rather than the general fund. By fiscal year 2025 all the state sales tax collected on gasoline purchases will go to road and bridge improvements.
If Congress were to clean-up the spending side of the federal highway trust fund, it still wouldn’t be enough funding to take care of all the road and bridge needs across the country…but it would give taxpayers faith that their money is being used wisely. Indiana state leaders understand that taxpayers expect their highway use taxes to simply fund road and bridge improvements, nothing else. Our elected leaders in Washington should realize this too. It’s time to put the trust back into the highway trust fund.