Skip to comments.Infrastructure Spending
Posted on 09/28/2011 9:10:06 AM PDT by MosesKnows
There is a great deal of talk today about additional Federal taxation or borrowing for infrastructure repairs. The depth of the talk appears to have a linear relationship with the lack of growth in the economy. This talk caused me to ponder several related questions.
I started with information readily found on the Internet
The Federal-Aid Highway Act of 1956 authorized the construction of the Interstate Highway System. $425 billion is the estimated cost of construction in 2006 dollars.
The government obligation to provide for the common defense was the constitutional rationalization for Congress authorizing funds.
Prior to the 1956 Highway Revenue Act and the establishment of the Highway Trust Fund, the General Fund of U.S. Treasury directly financed roads. The 1956 Act directed that federal fuel tax be used EXCLUSIVELY for highway construction and maintenance.
The Highway Revenue Act mandated a three cent tax.
There was a four cent gas tax increase in the 1950s.
The 1982 Surface Transportation Assistance Act increased the tax to nine cents with one cent going into a new Mass Transit Account to support public transport.
In 1990, the Omnibus Budget Reconciliation Act of 1990 increased the gas tax to fourteen cents - with 2.5 cents of the increase going to the Highway Fund and the other 2.5 cents going towards deficit reduction.
In 1993, the Omnibus Budget Reconciliation Act of 1993 increased the gas tax to 18.4 cents with all of the increase going towards deficit reduction.
The Senate Committee on Commerce, Science, and Transportation, formed in 2005, discussed raising the federal gas tax to 40 cents per gallon over five years, rising 5-8 cents annually for five years and then indexed to inflation.
During 2008, the fund required support of $8 billion from general revenue funds to cover a shortage in the fund. This shortage was due to lower gas consumption because of the recession and higher gas prices. In 2009 and 2010, respectively there were further transfers of $7 billion and $19.5 billion.
The Fund receives hypothecated tax revenues derived from excise taxes on highway motor fuel and truck related taxes on truck tires, sales of trucks and trailers, and heavy vehicle use. Money goes to the general treasury but is then credited to the fund.
There is a third question, how much money remains in the Highway Trust Fund. The fact that the Social Security Trust Funds consist only of I.O.U.s prompted this question.