» Expanded taxation at the state level could simplify the financing of regional high-speed rail networks.
Most of the discussion these days about how to expand funding for alternative transportation revolves around the role of the federal government: everyone in the game seems to be desperately waiting for members of Congress to move forward with a new transportation bill with hopes that senators and representatives will miraculously fall upon a brilliant funding device that will provide enough money to ensure a major surge in spending on highways and transit. It is a difficult task, to say the least.
Meanwhile, cities across the country have passed sales tax increases to fund the construction of new transit services, but those measures are liable to dramatic fluctuations depending on the economy, imperiling the goal of long-term funding stability. And cities cannot easily manage the construction of transportation projects designed to respond to regional demands.
Moving forward, then, advocates might want to look towards the states to push for real change.
State departments of transportation already play the major role in determining how transportation dollars are spent. Encouraging legislators to alter their thinking and work to build projects other than roads would be an important step in reforming the mobility agenda in the United States. Moreover, most states already enforce fuel taxes that are higher than the 18.4¢/gallon fee the federal government charges: they certainly are not naive about how to produce revenue.
For megaregions that extend across several states — take the Midwest as the easiest example — developing a regional funding mechanism for a high-speed rail program could be the ideal way to go about actually improving intercity transportation. By forming interstate compacts, states could implement regional authorities with the power to take revenues and distribute them into important projects aimed towards the completion of a regionwide system. States could sign onto a plan that benefits every member and then use this authority to ensure efficient funding and completion of projects, with the goal of integrating the region as a whole.
For the Midwest, such an authority could partake in around $25 billion in revenues over just a ten-year period just by imposing a 10¢ surcharge on gasoline consumption across the region’s eight member states. This would increase the existing gas tax in each of the states to between 45.7¢ (Missouri) and 67.2¢ (Illinois) per gallon. The projected revenues account for a 10% drop-off in fuel use (from 2004 transportation-based consumption levels) reflecting the increased cost of buying gas.
The advantages of signing on to a gas tax increase that applies to multiple states simultaneously are three-fold: one, it maintains existing relative gas tax levels across the region; it encourages the construction of a regional vision about how to spend the funds; and it allows politicians in each state to argue that they have a competitive reason to increase taxes: without doing so, their respective states wouldn’t be able to benefit from the benefits of joining the regional compact.
And indeed, with an arsenal of $25 billion with which to play, the regional compact would have enormous power to reshape the region’s transportation connections. It would be enough money to build a 220 mph link between Chicago and St. Louis — twice. And that’s just over the first ten years.
There’s no great complexity in this proposal, it’s simply a way of demonstrating how easily states could go about expanding their transportation systems without the involvement of the federal government, which may be evolving into a stumbling block too cumbersome to deal with.
Nonetheless, states seem unlikely to move forward unless they’re provided with a strong vision for how regional financial and political integration could work. From that perspective, proponents of high-speed rail should be working as hard as possible to instill a vision for how working across state lines — and taking fiscal responsibility in doing so — could make a major difference.