Minding the Gap: Deficit Spending and Transportation

Much has been written about the massive gap between what America actually spends on infrastructure, and what needs to be spent in order to keep the system we've built over generations in a state of good repair while also meeting future transportation needs.

Unfortunately, it doesn't look like the political leadership in Washington is planning to increase investment in transportation infrastructure any time soon. In fact, it may be more likely that we see reduced investment in transportation infrastructure over the next several years.

This would be particularly ironic, since it will likely be done in the name of budget deficit reduction. As Larry Summers, outgoing director of the National Economic Council, points out via Ezra Klein, we'd just be trading one deficit for another.

"You run a deficit both when you borrow money and when you defer maintenance that needs to be done. Either way, you're imposing a cost on future generations." A dollar in delayed road repairs and a dollar in borrowed money are not, in other words, that different: Both mean someone is going to have to spend a dollar later. In 2011, America should stop passing that buck.

But underinvestment is only part of the story of why we have such a large infrastructure deficit. A report released today by the U.S. Public Interest Research Group tells another part of the story.

Do Roads Pay for Themselves? Setting the Record Straight on Transportation Funding demonstrates that fuel taxes, truck sales taxes, and similar fees dedicated exclusively to transportation have rarely paid for the full cost of building and maintaining our highway system. On the contrary, roads haven't covered their own costs with these so-called "user fees" since the inception of the federal highway system. Moreover, the amount of general revenues that has been used to supplement fuel taxes and other similar fees has been steadily rising for decades, almost without exception. Every mile of roadway we build is adding to the deficit. By assuming that it's not, we are digging ourselves deeper into a deficit hole.

U.S. PIRG's finding that roads don't pay for themselves with so-called "user fees" is well supported by other analyses. SubsidyScope.org, a project of The Pew Charitable Trusts, found that in 2007, only 51 percent of the nation's road system was paid for by such fees. Even the Texas Department of Transportation (in a blog post that's now unfortunately been removed) copped to the fact that gas taxes don't come close to covering the cost of building and operating their roads. 

The fact that highways don't pay for themselves is not necessarily a bad thing. Fares don't cover the full cost of transit service, and airline fees and taxes don't cover our nation's airport and air traffic control network. The reality is that very few transportation systems cover their full construction, maintenance, and operational costs. That's not the problem; these projects have benefits that accrue broadly to society, and therefore warrant government investment.

The problem arises we start comparing different forms of transportation based on characteristics rather than benefits or outcomes. This is especially troubling when those opposed to government support for certain types of transportation systems - public transportation, passenger rail, biking and walking facilities - trot out the false notion that highways are financially self-sustaining in order to justify deep funding cuts for other transportation options. 

With Congress debating a potential cut in transportation investment over the next few years, if we must be more selective about the projects that we build, we should base our decisions on a full accounting of the benefits of each project weighed against others. And to honestly compare these benefits, it's important that we get our facts straight.

Header image by Pommiebastards, used under a Creative Commons license.