Congress pays $10.8 billion for a band-aid

Trailer/Body Builders August 2014 editorial

TRUCK upfitters sometimes point out that chassis aren’t useful until truck bodies and equipment are installed. And trailer manufacturers and dealers remind us that a tractor really doesn’t accomplish much without a trailer on the back.

But before we get too smug and self-important, we might think about how the trucks and trailers our industry produces wouldn’t accomplish much without a road on which to operate.

Highway funding remains in critical condition, in spite of the recent legislation signed this month that will provide life support for the Highway Trust Fund for a few more months.

The recent struggle to find money for the Highway Trust Fund provided insight into our Congress as well as what we as a nation have become.

In the overall scheme of things, highways should be a relatively safe cause for a politician to advocate. No one likes traffic jams. Potholes aren’t popular. And seven years ago this month, 13 people died and 145 people were injured when an Interstate 35 bridge fell into the Mississippi River.

Not many causes are important enough for proponents to say to Congress, “Please raise my taxes.” Highways are one of them.

As Bill Graves, president of the American Trucking Associations, said, “Companies that fail to maintain and modernize their plants and equipment inevitably fail. The highway system is no different.”

According to ATA, the trucking industry pays $18 billion annually into the Highway Trust Fund and is willing to pay more. When you make your living on the highway, that is understandable.

Let’s take a look at a few things that have happened since 1993, the last time Congress increased the tax on a gallon of gasoline and diesel:

•  Since 1993, the number of motor vehicles has grown an average of 1% per year. According to the most recent DOT figures, we share the road with 28% more motorists than we did in 1993.

•  Not surprisingly, the average urban commuter now spends 34 hours per year sitting in traffic. The average cost nationwide: $818 per person per year. The total bill for the country: $121 billion. Cost to the trucking industry alone: $27 billion. Where is the most time wasted in traffic? Ironically, it’s Washington DC. Motorists sit motionless on the road 74 hours per year.

•  According to the American Society of Civil Engineers, 32% of America’s major roads are in poor or mediocre condition. Traveling on bumpy, pothole-plagued pavement costs U S motorists $67 billion a year, or $324 per motorist. Bad news, unless you sell tires or run an alignment shop.

•  Cars and light trucks go 13% farther on a gallon of gasoline today than they did in 1993. That’s good news for most of us, but fuel efficiency does not help the Highway Trust Fund when taxes are collected by the gallon.

We could go on, but you get the idea.

So given all the expense of not maintaining our highways, you would think that Congress would be boldly promoting ways to get us from Point A to Point B safely, smoothly, and efficiently.

Not so fast. Not everyone is as willing as ATA to pay for what they use. An Associated Press poll published August 5 found that the majority of Americans—even those who drive less than once a week or not at all—believe that we receive more value from our highway system than it costs us. And yet:

•  58% oppose raising gasoline taxes to pay for it.

•  By a 2-to-1 margin, people oppose privatizing the system and charging tolls to pay for it.

•  Only 20% support a system that assesses a fee based on mileage driven to pay for it.

In summary, we love our highways, but we don’t want to pay for them. And Congress knows that.

With that in mind, it kind of becomes understandable why Congress decided to finance the Highway Trust Fund the way it did—a temporary patch that scrapes up enough money to keep the program going until May. By using “pension smoothing,” the U S treasury gets some additional tax revenue by allowing companies to postpone contributions to their pension programs. After paying higher taxes now, these companies get to use the rest of the money on other projects—and put off pension funding until later. An idea that only a policy wonk can appreciate, Congress made it possible to kick two cans down the road at the same time.

We need a solution. And we need to realize that there is no such thing as a free lunch or even a free freeway. ♦

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