Congress expects to reauthorize the Intermodal Surface Transportation
Efficiency Act (ISTEA) next year. But doing so will cause serious damage to
many American cities because the law gives cities incentives to increase
traffic congestion and air pollution.
Instead, says a new paper published by the Cato Institute, Congress should
eliminate most of the federal gas tax and let states and cities make their own
transportation plans. While this is unlikely to happen, Representative John
Kasich has a proposal to let states "opt out" of federal transportation
funding. States that opt out will get no federal highway or transit dollars,
but their citizens will also no longer have to pay 15 cents of federal gas
taxes for every gallon of gasoline they buy.
Nearly every state will benefit from opting out. Thirty-eight states already
pay more into the gas tax fund than they get back. The other twelve states will
benefit, even if they lose total dollars, because they will be able to plan
their own transportation destinies free of federal red tape and ideologies.
Oregon, for example, is one of the twelve states that get more than they pay
into the gas tax fund. That is because Oregon has been spending hundreds of
millions of dollars on a wasteful light-rail system that almost no one will
ride. If Oregon had to fund its own transportation, it would be more likely to
put its money into activities that really reduced congestion and kept its
Originally passed in 1991 at the urging of transit advocates, ISTEA has several
For a complete analysis of ISTEA by Thoreau Institute economist
Randal O'Toole, download the Cato Institute paper, ISTEA: A Poisonous Brew for
American Cities directly from Cato's website. The paper is
- First, it imposes a planning process on cities getting federal funds. This
process is easily captured by special interest groups hostile to auto traffic
and mobility in general.
- Second, it promotes pork barrel projects such as rail even though rail has
been proven to be far more expensive per rider than high-occupancy vehicle
lanes or other auto-oriented solutions to congestion.
- Third, the law forbids cities with serious air pollution problems from
using funds to add highway capacity even though pollution is a function of
congestion, and highway capacity is one solution to congestion.
- Fourth, the law rewards cities whose air pollution problems become worse
(because of worsening congestion) with special funds designed to "relieve"
congestion--but in fact, many of the funded activities will actually increase
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