New Study Calls For Change in Highway Funding Program

The U.S. would have an additional $10 billion a year to improve our nation's highway system if the government stopped diverting federal gas tax funds to such projects as ferryboats, trails and mass transit

, according to a new study conducted by the Reason Foundation.

The Reason Foundation is a nonprofit organization that conducts non-partisan public policy research. The study, "Restoring Trust In the Highway Trust Fund," explains how refocusing the Highway Trust Fund can restore the public's trust in infrastructure spending, which has been severely damaged. It is authored by Robert Poole, director of transportation policy at the Reason Foundation, and Adrian Moore, vice president of research at Reason.

While the federal gas tax is meant to improve the Interstate Highway System, these funds have been diverted to other government programs, the report says. These programs are not national, and they're unable to generate significant user revenues and require large subsidies. The report points out that they should funded by state and local governments, and that the federal fuel tax should be refocused on the Interstates.

"Sooner or later Congress is going to have to deal with the highway bill and the major shortfall in highway investment," said Poole. "Congress could dramatically increase funding to reduce the large backlog of cost-effective highway projects by shifting non-highway programs either to states or to general revenues. This would restore the users-pay/users-benefit principle of the Highway Trust Fund by focusing on rebuilding and modernizing the Interstate system."

This new approach to funding would also reduce federal mandates and give states more control over their transportation spending, the report says. States would have incentives to reduce waste and administrative costs; prioritize projects that will produce the largest benefits; embrace public-private partnerships that shift financing and risk away from taxpayers and onto private investors; and use technology, tolling, and congestion pricing to produce a sustainable highway system.

To access the entire report, click here.