Quote:
Originally Posted by Busy Bee
In defense of California's lack of a robust funding commitment, this HSR program, being the first of its kind in the nation and seemingly the model to hold up for similar transformative corridor aspirations around the US, is exactly the kind of infrastructure paradigm shift the federal government should be funding with a 90/10 split. I firmly believe had it been pitched in another more confident and optimistic era (1950s-1970s) this would have already been a done deal.
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Maybe, maybe not?
Do you know what Ike had to do to get funding for his National Defense and Interstate Highway System?
The Congress demanded a dedicated tax.
1932
A temporary 1-cent-a-gallon federal tax is imposed. It is not dedicated to building roads but rather to deficit reduction in the midst of the Great Depression. It is scheduled to expire in 1934.
1933
Congress votes to extend the tax and increase the rate to 1.5 cents a gallon.
1934
When Prohibition ends (so the feds can again tax booze), the gas tax falls back to 1 cent a gallon, where it stays until 1940.
1940
In anticipation of World War II, the tax rate is hiked to 1.5 cents a gallon through June 1945. Later, it is made permanent at that level.
1951
To help pay for the Korean War, Congress boosts the gas tax to 2 cents a gallon.
1956
Congress creates the Highway Trust Fund, increases the federal gas tax to 3 cents a gallon and dedicates 100% of the revenue to the Trust Fund to help pay for the interstate highway system.
1959
Congress pushes the tax to 4 cents a gallon.
1983
Lawmakers add a nickel a gallon, setting the rate at 9 cents a gallon, with 1 cent dedicated to mass transit projects.
1990
An additional 5 cents a gallon is added, bringing the tax to 14 cents a gallon. Half of the increase is dedicated to highways, the other 2.5 cents aimed at deficit reduction (the same goal as the original tax in 1932).
1993
Congress adds 4.3 cents a gallon to the gasoline tax, with the added revenue dedicated to deficit reduction. With the addition of the 0.1-cent-a-gallon levy to fund the leaking underground storage tank trust fund the federal tax rose to 18.4 cents a gallon. That’s where it stands today. Since 1997, the full federal gasoline tax has gone to the Highway Trust Fund.
Not one penny of Federal gas taxes were dedicated to highways until 1956, at 3 cents per gallon, all dedicated to the Highway Trust Fund. The gas tax before was at 2 cents per gallon, which was supposedly paying for the Korean War even though the armistice was signed in 1953.
The 1990 gas tax rise was a significant issue during the 1990 Presidential election, GHWB "Read my lips, no new taxes". Clinton won on GHWB breaking a promise to not raise taxes. 3 years later, Clinton raised the gas taxes again being hypercritical doing the same thing.
The Congressional Budget Office (CBO) estimates that Highway Trust Fund tax revenue will total $43 billion in fiscal year 2023. Revenue from the federal excise tax on gasoline ($25.0 billion) and diesel fuel ($10.8 billion) accounts for 83 percent of the total. The remaining trust fund tax revenue comes from a sales tax on tractors and heavy trucks, an excise tax on tires for heavy vehicles, and an annual use tax on those vehicles. In addition to dedicated tax revenue, the trust fund receives a small amount of interest on trust fund reserves.
Before 2008, highway tax revenue dedicated to the trust fund was sufficient to pay for outlays from the fund, but that has not been true in recent years. Since 2008, Congress has transferred general revenues to the fund on numerous occasions including $118 billion in the Infrastructure Investments and Jobs Act of 2021.
Those transfers will enable the trust fund to meet spending obligations through 2027, but projected shortfalls will appear again by the end of 2028. The Congressional Budget Office projects that, by 2033, outlays from the Highway Trust Fund will exceed trust fund reserves by a cumulative $181 billion for the highway account and by $60 billion for the mass transit account, even if expiring trust funds taxes are extended (CBO 2023).
A reckoning is coming soon, not enouogh money for highways of trains. Where oh where will the money come from?