Last winter and spring, you probably heard a lot about work in the Idaho Legislature to increase transportation funding. In April, after a lot of wrangling, the Idaho Legislature passed a bill to increase the gas tax and raise registration fees to help address Idaho’s significant transportation funding shortfall.
Now, you may be hearing about transportation issues at the federal level – funding, transportation authorization bills (or the lack thereof), and more.
It seems confusing. Why are both the state and federal governments involved in funding transportation? Can’t just one or the other handle it?
Just as with many parts of our system of government, states and the federal government share the burden and jointly reap the benefits of funding our transportation system. The system recognizes that as “united” states, our transportation and infrastructure needs do not stop at state lines – our national and local economies depend on everything from freight to tourists easily moving around the country. We also recognize that the need and ability to pay for infrastructure varies greatly from place to place. For example, in rural Idaho, we have stretches of highway running hundreds of miles with very small local populations. On the other hand, along the densely populated eastern seaboard, the ratio of population to road miles falls on the other end of the spectrum.
Everyone pays the same federal fuel taxes, whether you live in Florida or Idaho. The taxes collected by the federal government are then re-distributed back to the states. In Idaho, we benefit greatly from this model. For every $1 our residents pay in federal fuel tax, Idaho gets $1.65 back. In fact, 54% of the funding for Idaho’s transportation system is federal. On one hand, this is a tremendous benefit to the state; on the other hand, it underscores how reliant we are on federal funding as compared to our own state funding. The national average for federal funding is only 24%.
When it comes to state taxes, each state can choose how much to tax and how to levy that tax, depending on its needs, population base, and desires of its citizens. In Idaho, our state transportation funding comes mainly from fuel tax and registration fees. Meanwhile, Oregon is experimenting with a voluntary vehicle miles of travel tax (see blog below). As a state, they are able to try a new way to tax to see if it works for them.
Both federal and state funding have their benefits and drawbacks. It would be tough for Idaho to fund its transportation system alone, and equally difficult to fund it with nothing but federal funds.
So, where does that leave us with regards to the ongoing discussions regarding transportation funding and policy?
As a state, we can’t wait for Congress to act to solve all our transportation needs. Our legislature needs to take responsibility, as it did last spring. On the other hand, we also cannot let Congress ask states to shoulder the burden alone. Just because Idaho, and other states, recently raised fuel taxes or made similar changes, Congress can’t simply say “problem solved” and move on.
We must be vigilant on both fronts and be part of the conversation to ensure transportation funding needs are met today and in the future.