Cutting the Gordian Knot on Highway Reauthorization

The principal obstacle to reauthorizing the federal surface transportation program is a dispute over the size of the program and the amount, if any, of an increase in federal fuel taxes. A gap of $125 billion (over 6 years) separates the Bush Administration’s proposal from that of the House of Representatives, with the latter favoring a large fuel tax increase. This article suggests that a significant expansion of tolling and public-private partnership options for states could lead to $50 billion in net new investment over 6 years, whereas indexing of fuel taxes could add another $15 billion. If both anti-tax conservatives and the highway community could agree to such a compromise, America could achieve a much-needed increase in highway investment without a “tax increase” in the normal sense

Administration (probate law · Business · Compromise · Economics · Fuel tax · Investment (military · Knot (papermaking · Obstacle · Political science · Politics · Public economics · Revenue · Energy, Environment, and Transportation Policies · Engineering · Fiscal Policy and Economic Growth · Law · Transportation Planning and Optimization · Finance