In the U.S., the federal government has adopted a broad philosophy behind road building: the user pays.
The money to build and maintain roads and highways comes from the general public, primarily through a gas tax that’s collected every time someone fills up at the pump.
One major benefit of this system is that it’s efficient. The federal government collects this money, distributes it to the states, and the states spend the money as they see fit.
One potential downside of this system, according to a recent analysis from the Brookings Institution, is that states may not be sharing this money fairly with cities.
Adie Tomer is a senior fellow with the Brookings Institution who joined the Texas Standard to discuss his findings. Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: Your research suggests that local governments may not be getting their fair share of federal gas tax revenue for things like road building and maintenance. Is that a federal imperative or just an issue of equity and fairness here?
Adie Tomer: I think it’s an issue of both.
Local governments control a huge amount of roadway infrastructure. Listeners should be thinking about when you pull out of your proverbial driveway or your parking garage, oftentimes you’re moving on a local street, often a major local street. You might be taking a federal interstate too, but there’s a lot of major local we use out there.
So, what’s the state supposed to do if all things were equitable and if they were following the laws?
Yeah, ideally, we would set up a system that would actually deliver the gas tax revenues. As you said in your opening there, the user pays back to the systems that help move all these people, right?
So in the case of Texas, it’s about 27% of all mileage that’s driven is done on local roads. So I think it’s a kind of fair way to think about it – that roughly 27% percent of dollars would be heading back to those local road owners, too.
But when you did your own sort of analysis of this, you found that Texas was among the worst when it comes to distributing those funds to local jurisdictions.
Yeah, that’s right. So TxDOT’s own budget is sending only 4.2% of its highway-related spending back to localities.
So again, to put those two numbers in perspective, we’ve got 27% of mileage driven in a relative proxy for gas taxes being created or produced on local roads, but only 4% of the revenue is going back to them.
So when you think about how much money folks living in cities are putting into this federal pot of money for transportation, what’s the gap between what they’re putting in and what they’re getting back?
We estimate that to be $500 million to $1 billion dollars per year, which really adds up over time. That’s just in Texas.
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Why is it set up this way, where the feds get the money in the first place? I think I was looking at some numbers that said that Texas contributed more than $3.5 billion to our national transportation fund. How does that compare to other states and should we not just be collecting the money and then distributing it from here?
I mean, Texas is the largest state in terms of the revenue contributions, and that speaks to its prowess here, right? Large cities, large metro areas, a lot of highway miles, a lot of freight moving on those corridors, too. So it’s making enormous contributions.
But in many ways, what we’re seeing here, this discrepancy in spending is a legacy of building out the interstate highway system and the U.S. highway network back from 1956.
So at that time, we were building these highways that didn’t exist. We kind of made a deal in Congress and Washington, D.C., that the states would be the ones to do it. We collected gas taxes at the pump. We were doing it before 1956.
But after that, we had that federal gas tax. And it went to federal Washington, went right back to the states and they built those highways. So states are still in the proverbial driver’s seat.
So if the current funding model is unfair to local governments, what’s a better way to do this?
So we’re actually proposing that it’s time to think about distributing money directly to localities, rather than just relying on the states to do it themselves. Because again, the record shows, and I want to be clear, this isn’t necessarily a criticism of TxDOT. They aren’t required to give the money to localities.
What we’re seeing as a pattern is, if we give these states the money with their own network to maintain, they’re going to continue to do that. So we’re proposing that the federal government actually sends more of these gas tax dollars directly to localites.
And what that means, let’s say, in a place like Austin is it’s not just going to the county level, it’s also going to municipalities, how they can split that money. So for folks who see those potholes on local roads from all kinds of various damages or just use, they’ll have more money in their coffers to actually repair those roads quick.
