Seattle Times Editorial Board says raising federal gas tax "probably a bad idea" for Washington state

July 7, 2014

The Seattle Times Editorial Board says Congress needs to act to fix the soon-to-be-broke Highway Trust Fund, but they say raising the federal 18.4 cents-per-gallon gas tax is not the way to do it. Lately, Congress has been spending money out of the Highway Trust Fund faster than gas tax money comes in to support it.  The solution, Times editors say, needs to come quickly because Congress only has about 30 days to solve the problem. If the account goes into the red, as expected in August, the federal government could delay payments to Washington state officials, who depend on those funds to pay contractors and their workers.  So much for “trusting” a federal trust fund.

It appears Washington state transportation officials are cautiously optimistic Congress will act to stabilize the fund. But if Congress doesn’t act, a reduction in federal to state payments totaling $29 million could delay 43 projects planned for completion this summer. Some Washington State Ferry projects could also be at risk. The WSDOT estimates they can tread water for a month with the reduction in reimbursements.

WSDOT officials have also adopted “a conservative forecast” for federal payments next year by assuming a 25% reduction in federal funds flowing to the state. However, their forecast assumes some Congressional action to shore up the trust fund. Should Congress not act, WSDOT says the state might not receive the nearly half of a billion dollars in projected federal apportionments over the next fiscal year, shelving future projects.*

Since 2008, federal lawmakers have kept the fund afloat by diverting over $40 billion from general taxes to the Trust Fund to pay for increased levels of spending. At current rates of highway spending, another $10 billion would be needed this year. Some federal lawmakers want to raise business taxes, cut spending, or increase the federal gas tax by as much as 12 cents per gallon to bring the Trust Fund back in the black.  The higher federal tax would come on top of an added 11.5 cents per gallon increase being debated in Olympia.  If that happens, about 20% of what people pay at the pump will be taxes when gas is four dollars per gallon.

A better solution would be to shift all highway funding to the states. In the 1950s the federal government set out to build a modern Interstate Highway System using gas tax revenues. We did it.  The United States has one of the finest cross-continent, all-weather, high-speed road networks in the world. Today all the federal government does is collect gas tax money and send it back to the states, with a lot of strings attached.

The state legislature could then decide whether to adjust gas tax rates based on our specific needs. In addition, the state legislature could better utilize public-private partnerships to expand and maintain highway capacity. And we would never again face the crisis of a federal highway “trust” fund going broke.

*Updated 7/8 - edited for clarity and added link