Politicians On Left and Right Want Someone Else to Pay for Transportation

Politicians from across the political spectrum are increasingly shifting the costs of transportation services and infrastructure from the people who use them to taxpayers. The $1.2 trillion infrastructure bill signed into law last week by President Joe Biden will only make the problem worse.

For a conservative example of this phenomenon, witness Florida Republican Gov. Ron DeSantis’ announcement on Monday that he would be asking the state legislature to “zero out” the 26.5 cents in per-gallon taxes the state currently levies gas—a measure he pitched as a necessary relief from the inflationary effects of President Joe Biden’s policies.

“We’re in great financial shape, we have surpluses. We have the ability to do what we need to do from a standpoint of infrastructure,” said the governor at a Daytona Beach press conference, adding in response to a question that this gas tax holiday would not involve cutting funding to road projects.

A few days prior, newly-elected progressive Boston Mayor Michelle Wu announced that she would be asking the city council to approve $8 million in funding to expand the city’s fare-free bus line pilot program

“This expansion of fare-free bus service is an important example of how municipal leadership can not only immediately improve the lives of Bostonians, but also set us on a path to a more just transit system for future generations,” said Wu last Wednesday.

Both announcements differ in the amount and intended beneficiary, but on the fundamentals, they couldn’t be more alike.

Rather than charge drivers and bus riders directly for the transportation infrastructure they’re using, both Wu and DeSantis instead want to heap that burden on taxpayers in general.

The $8 million that Wu needs from the city council represents the fares that people who currently ride the bus are willing to pay for it. Her plan is to voluntarily say “no thanks.”

DeSantis’ gas tax holiday is framed as relief from both taxation and inflation. Many a conservative and/or free marketer might think it’s a more small government proposal than offering free bus rides. Hardly.

If the governor sticks to his word about not cutting infrastructure spending, then he’ll have to find new funding to plug the lost $1 billion in revenue. That means shifting the burden from gas tax-paying motorists and onto everyone—whether or not they drive.

Federal largesse makes both politicians’ plans easier.

Wu has asked the city council to make $8 million in federal funds available for her free bus route plan. Although DeSantis has been less explicit about how he will fund his gas tax holiday, it appears that his plan is benefiting from federal spending too.

The budget the governor signed into law in June directs $1.75 billion of the federal COVID-19 relief to the state’s highway fund. That obviously gives him more room to shower a tax subsidy on motorists than if Florida’s roads had to rely on state revenues alone.

Moving from a system of user fees to general taxing and spending is a bad idea when it comes to infrastructure for a number of reasons.

Firstly, it’s unfair to taxpayers who now have to shell out more money for transportation services, be it buses or roads, they don’t necessarily use. The federal funding propping up Wu and DeSantis’ plans makes this even worse. Taxpayers across the entire country are being asked to subsidize transit in Florida and Boston.

Fare-free transit has the added problem of diminishing whatever incentive transit agencies have to provide decent, effective service to riders. An agency that gets the exact same amount of revenue regardless of how many people ride the bus sees no upside to making its riders happy.  If anything, additional users become just another cost or inconvenience, while the politicians making funding decisions become the real customers.

Gas tax revenue, meanwhile, provides transportation officials with at least some knowledge about how much road motorists are willing to pay for. (Tolls and mileage-based user fees would be a more direct, efficient means of providing that information.)

But DeSantis’ proposed gas tax holiday completely, albeit temporarily, severs the link between road funding and road usage. Without the information the link between funding and usage provides, it becomes easier for the state’s Department of Transportation to build roads that no one is willing to pay for while neglecting maintenance on lanes where people actually drive.

The recently enacted $1.2 trillion infrastructure law will only incentivize states and localities to move away from a “user pays, user benefits” approach to transportation spending to get worse in the coming years.

The law contains $550 billion in new spending, including $110 billion for roads and bridges and $39 billion in additional transit funding.

The bill does not raise gas taxes, or make tolling easier. It also only contains a small pilot mileage-based user fee program. That means the extra road funding included in the bill is effectively a subsidy for highways that’ll have to be paid for by taxpayers in general. The additional $39 billion in transit funding meanwhile will go toward transit systems that, in many cases, are still seeing massively reduced ridership from pre-pandemic levels, and therefore massively reduced farebox revenues.

In both cases, we’ll see more transportation infrastructure and fewer user fees to cover them.

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