Transportation Policy

Reason Writers Around Town: Shifting Transportation to a Users-Pay/Users-Benefit System


Reason Foundation Director of Transportation Robert Poole writes:

As Congress grapples with impending budget cuts, we need to do a fundamental rethink of how the federal government assists with much-needed transportation infrastructure. The reality going forward is that there will be no such thing as "general revenue" funding for much of anything beyond entitlements, defense, and interest on the national debt. As long as the federal budget remains grossly unbalanced, general-fund investments in infrastructure are essentially borrowed from China—an unsustainable situation.

Three key principles are necessary for a sustainable federal role in infrastructure:

  1. Users should pay for the infrastructure they use;
  2. Large capital projects should be financed, via revenue bonds and other mechanisms; and,
  3. The federal role should be narrowed to do only things that are truly interstate in nature, which means shifting more responsibility to the states, metro areas, and the private sector.

Reason Foundation's new policy brief, "Funding Transportation Infrastructure in a Fiscally Constrained Environment," explains why the model used for federal transportation programs—user taxes feeding centralized trust funds that make annual grants for cash-based investments, increasingly subsidized by general-fund money—needs replacing:

  • Because these user taxes are seen as taxes, Congress seldom increases them, even when their real value declines due to inflation and other factors.
  • Each transportation program involves large cross-subsidies, in which some users pay for other users' projects, often for projects of low real value.
  • Federal money comes with costly strings attached, such as Davis-Bacon and Buy America requirements, needlessly raising the cost of federally aided projects.
  • Federal programs over-emphasize new capacity, leading to large amounts of deferred maintenance on existing infrastructure.
  • Most federal programs encourage state and local governments to fund large capital projects out of annual cash flow, rather than financing them over time, as businesses (and home-buyers) do.

The report sets out a comprehensive set of organizational, tax policy, and regulatory changes that would implement the above principles, thereby ensuring needed, cost-effective investment in airports, air traffic control, highways and bridges, ports and waterways, transit, and passenger rail.

Full piece here

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  1. Do you know who else is a transportation planner?

    1. Santa?

  2. It’s not fair if everyone isn’t forced to pay for it. It doesn’t matter that they don’t use it, they still benefit from it. See, an employee who makes your sandwich uses public transportation and they don’t have a car and wouldn’t work there otherwise blah blah blah schools roadz somalia.

    I really like the idea of pushing the costs of mass transit to the users and the roads to drivers.

    Just as the general public shouldn’t have to pay much for roads, car/truck drivers shouldn’t have to pay much (or anything) for mass transit systems. There is a disparity because bicyclists get their own lanes, and some government vehicles use untaxed fuel.

  3. People got in their mind that convenience for cars is an entitlement, resulting in public policy that altered the concept of roads.

  4. Ahem…***cough*** -clears throat-


  5. That dude really seems to know what he is doing. Wow.

  6. Federal funding has biased many transit investment decisions away from cost-effective bus and bus rapid transit projects to very costly and not very effective rail projects. Subways and commuter rail have a key role to play in very dense urban areas with large traditional central business districts, but that description applies to only a handful of America’s largest urban areas.

    That’s the reason (well, a reason) why the Silver Line of the D.C. Metrorail is such a boondoggle. What makes sense in a very dense urban area doesn’t necessarily make sense in the outer suburbs.

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