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Tax increase would fund transportation waste, inefficiency

Tax increase would fund transportation waste, inefficiency

Wayne Hoffman
February 1, 2009

Those of us who believe in limited government tend to get worked up when new government programs are proposed or when taxes are raised to accommodate some state objective. We also understand that government exists for a purpose, and sometimes those purposes require the creation of programs to benefit the general public and the collection of money to pay for it. Fine.

But the reality is, even those government programs we're willing to accept and support have a natural tendency to want to grow. Over time, they become inefficient. They require more money. And the government will openly and convincingly insist that we increase the amount we're paying in. That's where we balk. We insist that government re-evaluate.

Take transportation. Road construction and maintenance is a legitimate government function. Most of us have no problem paying for good highways. Today, Idaho needs new and better roads. So Gov. Butch Otter started the legislative session proposing tax and fee increases to fund highway maintenance and construction.

Under Otter's plan, if you drive just 15,000 miles a year (common for rural Idahoans and urban commuters) and you're lucky enough to get 30 miles to the gallon, you can expect to pay another $50 a year once the gas tax increase is fully implemented five years from now. That does not include the other new taxes and fees being proposed. For some of us, this is problematic.

Some might stop me here and tell me $50 is not a lot of money. I'll argue that it's the height of hubris to tell me what I can and cannot afford. That's not the point today; we now have two recent reports proving that increased fees and taxes will merely be used to subsidize inefficiency and hyper-regulation.

An audit of the Idaho Transportation Department shows as much as $37 million could be saved by changing procedures and operations within the agency. That alone should be cause for pause. Each penny increase in the gas tax raises $9 million, according to the state Transportation Department. That means four cents of the 10-cent fuel tax increase won't even cover the cost of inefficiency.

Further, the U.S. Government Accountability Office released a draft report last year that concluded as much as 34 percent of the cost of transportation projects are the result of regulatory hurdles all throughout the planning and construction process. That's just paying people to push papers around. It builds not a single mile of new roadway.

Meanwhile, the federal government is also looking longingly into that empty vault we call the Federal Highway Trust Fund. Some lawmakers would like to raise the 18.4-cent-per- gallon tax, perhaps even double it. Contradictorily, Congress and the president are mandating more fuel efficiencies from automakers and even hope to replace oil consumption with "green" energies. That means even if the number of vehicle miles driven increases, gas tax collection will remain flat or decrease, and we'll still have a problem filling the highway coffers.

This road trip only leads to one place: ever-higher taxes. No matter how much is raised, it will never be enough. The first task then, before any taxes or fees are raised, is to fix the inefficiencies. Make the system work, and don't hound taxpayers for more money when there's general agreement the system is collapsing under its own weight.

And while we're re-evaluating the functionality of Idaho's transportation system, we should consider the success that other states and countries have had leaving design, construction and maintenance to private companies. We can even look inward. Idaho's early history reveals several successful private transit efforts, including franchises from the territorial Legislature to operate roads, ferries and bridges.

Today, highways in California, Texas and Virginia are designed, constructed and managed by companies holding long-term leases of up to 99 years. In fact, there are more than $25 billion in privately funded construction projects at various stages of development throughout the United States. The cost savings from having private companies involved in a more substantial way is worthy of review.

Someday, the marvelously wider Interstate 84 between Boise and Caldwell will again be at capacity or will be in need of significant repairs. Therefore, the debate today is not just about the tax and fee increases Otter has proposed. It's about the tax increases that have yet to be proposed, the inefficiencies we're subsidizing, and bigger government we'll be left with if we can't figure out a better way to make this work.

Idaho Freedom Foundation
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