Performance, Not Politics, Should Govern Gas Tax Revenue

Marc Kilmer Nov 29, 2013

Thanks to the recent gas tax increase, you’re paying more at the pump when you fill up your car in Maryland. Now that the state has a lot of new revenue to spend, how will politicians divvy it up? Will they spend it to support infrastructure which benefits the majority of Marylanders? Or will they waste the money on projects that only serve a small number of people? Special interest groups are pushing for the latter.

According to the Maryland Reporter, “Maryland needs to continue to invest more in public transportation as it sees a boost in funding from the rising state gas tax, transportation experts said recently at an annual transportation summit of the Greater Baltimore Committee.”

The Greater Baltimore Committee should be happy. The state already invests very heavily in public transportation. In fact, there’s a strong case that the state over-invests in it. As Wendell Cox and Ron Utt point out in Maryland Public Policy Institute’s study “Rethinking Maryland’s Proposed Gas Tax Increase”:

Over the past five years, including the current fiscal year, transit will have received 50 percent of MD-DOT’s transit and highway funding this is up sharply from the 41 percent in the previous five years. Transit received approximately 95 percent of the $500 million increase in funding from 2003 to 2012.

And what’s the problem with this? As Cox and Utt explain:

In 2009, the last year for which complete transit ridership and highway use data are available, 48 percent of the highway and transit spending was on transit, 20 times the statewide transit travel share of 4 percent.

In effect, drivers are paying high gas taxes to massively subsidize transit options that are enjoyed by only a few Marylanders. It’s a misallocation of funds that, if continued, will make congestion even worse in our state.

Donald Fry, president of the Greater Baltimore Committee, is right when he says, “The wisdom with which we use these transportation dollars may mean the difference between a future of mobility and one of stagnation.”  What would be a wise way to use these transportation dollars? The Maryland Public Policy Institute has a policy solution:

To maximize the impact of transportation revenue, Maryland needs a performance-based funding strategy to rank transportation projects according to greatest impact on congestion mitigation. Such an approach would yield a measure of hours or minutes saved per dollar spent. Those with the greatest yield would receive funding. The performance-based strategy would replace our de facto ‘transportation choice’ strategy, which results in politically motivated transportation funding that does little to relieve congestion.

It is wishful thinking to assume that transit will ever be used by a large number of Marylanders. Ignoring the reality of how the vast majority of people in this state travel is not wise planning. State transportation officials should not be focused on pipe dreams of large numbers of people using mass transit; they should be focused on ensuring that the transportation infrastructure that most Marylanders use works well.

The wisest use of funds is to provide transportation infrastructure that benefits the vast majority of Marylanders. If the state neglects investing in infrastructure to support the 9 out of 10 Marylanders who drive (as opposed to using transit), the state can alleviate stagnation. If the state simply ignores the fact that most people drive, and continues spending so heavily on transit, then it will guarantee more gridlock.