Solutions for a Bankrupt Trust Fund

piggy bank

A Republican-dominated Congress under President George W. Bush couldn’t do it. A Democrat-dominated Congress under President Barack Obama couldn’t do it. The current fragmented Congress couldn’t do anything.

America’s federal highway program is crumbling faster than our highways and bridges, and the odds against a solution oozing out of the primordial slime that is the current American Congress are oppressive at best.

The Highway Trust Fund (HTF) is on a fast track to insolvency, which is the inevitable result of freezing the federal fuel tax, its sole funding source, at a 20-year-old level, ignoring two decades of inflation, and substantial increases in the usage of highways and bridges by our ever-increasing population. The HTF is projected to zero-out at the end of the federal government’s 2014 fiscal year, barring a Congressional intervention.

Not many pundits are forecasting how the failure of the HTF will impact America’s roads and the hard hit industries that maintain them, probably because experience has shown government leaders find a way to patch together temporary solutions to dire crises. Whether that happens again, here are three fearless forecasts for road funding changes in the next decade.

Tolling will take over. In November, we discussed a recent Reason Foundation study that proposed opening the entire Interstate Highway system to tolling as a way to create revenues for its reconstruction. Unless mid-term elections usher in a Congress willing to raise the fuel tax, this seems inevitable and the only rational solution to a mounting crisis in U.S. surface transportation.

One of the hallmarks of nationwide tolling will be a standardization of automatic tolling systems so that motorists can pay their taxes without stopping, no matter what state they’re in.

With the cost of replacing bridges ranging from the tens of millions of dollars for small ones to hundreds of millions of dollars for big ones, bridge tolling is going to be the rule, not the exception. It may be that the next generation of motorists will never cross a major river without paying a toll.

Partner Insights
Information to advance your business from industry suppliers

Universal tolling will bring in its own problems and challenges. For example, collecting $5 or $10 worth of tolls from a scofflaw in a distant state could be a problem, especially if an emaciated federal bureaucracy is unable to intercede. Another example: If tolls are managed too aggressively, traffic loads on secondary routes could create safety and maintenance problems.[email protected]

Most sweeping changes bring unforeseen consequences. In Europe, one potential consequence of national tolling came up for discussion last fall when spokesmen for Germany’s national security forces made a case for monitoring tolling data as a way of tracking suspects and locating criminals. This discussion took place at the time when Germany was abuzz over revelations that America’s NSA was monitoring Chancellor Angela Merkel’s cell phone, among many others, and it had a chilling effect on the proposal.

It would have the same effect here. One of the few things that unite Americans of the left and right is a fear of government monitoring, though even that might not outweigh the terrifying specter of an increase in the fuel tax.