Libertarian Reason Foundation proposes U.S. highway fund changes; they're just what you'd expect

It's a tough thing to combine support for the automobile industry with an extreme "free market" ideology. How can you logically make the argument that everyone should just do what's best for themselves when your product absolutely requires a network of roads that reach – and are paid for – everyone?

While the reasonable discuss the potential of a higher gas tax and ways to reduce oil dependence through any means necessary, the libertarian Reason Foundation has issued an interesting (shall we say) paper called Restoring Trust In the Highway Trust Fund that, basically, calls for an "Interstate 2.0 approach" to the U.S. Highway Trust Fund that would narrow its "focus to rebuilding and modernizing the Interstate system, both urban and inter-city." In other words, your gas taxes would pay for the big roads, and that's it. No livability improvements, none of the biking and walking improvements that DOT Secretary Ray LaHood embraced earlier this year, nothing like that. Mass transit is a local issue, the report says, adding:

We don't think there is any national interest or benefit from local transit systems or reason for the federal government to help fund them. *cough*national security*cough*

The report authors also don't like, for example, over five years, the federal government spent $3.2 billion of the fund's money on Congestion Mitigation and Air Quality (CMAQ). A more interesting discussion in the paper takes place over vehicle miles traveled (VMT charges). Read about that after the jump.

[Source: Reason Foundation via American City]

The authors write:

Our premise in this report, despite its near- term emphasis on federal fuel taxes and the Highway Trust Fund, is that replacing fuel taxes with VMT charges is the preferred way forward, for 21st-century highway funding.

In advocating this shift, however, we emphasize that what the nation should adopt are VMT charges, not VMT taxes. This is not mere semantics. This paper has stressed the many advantages of the users-pay/users-benefit model for highway funding. As noted in the main text, this means of paying for highway use is analogous to bills (based on usage) for using other network utilities such as electricity, telecommunications, water, natural gas, etc. Hence, a VMT charge should be configured as a payment for the use of roadway infrastructure. ...

What has not been included in these principles are road-user payments for negative externalities imposed by road users on the surrounding people and environment. Addressing such externalities-noise, tailpipe emissions, CO2 emissions, etc.-is a task for government in its regulatory role. In the United States, this is sometimes done via regulations (e.g., CAFÉ standards on motor vehicle fuel economy, technology mandates such as catalytic converters) and sometimes via externality taxes (e.g., proposed carbon taxes or the cap-and-trade alternative). Various states have also legislated requirements for noise walls along certain types of roadways in urban areas.

It is legitimate for government to take action against externalities that cause harm to non- consenting parties. But our distinction is between the roads-utility function (which can be carried out by DOTs, toll authorities, and concession companies) and the regulatory function (which is purely governmental).

Some of those proposing VMT charges want such charges to be based on a host of factors that are regulatory in nature-such as engine size, CO2 emission level, number of occupants, etc. Doing so would seriously blur the distinction between a charge and a tax, thereby undercutting the utility-pricing model and the many benefits of the close connection between users-paying and users-benefitting. It would also increase the political difficulty of replacing fuel taxes with VMT charges, by introducing a host of "social engineering" factors that would engender opposition.

Opposition from whom, we wonder?

In any case, the debate over changes in the gas tax and the potential of introducing VMT taxes (or fees, whatever you want to call it to keep the ghost of Alisa Zinov'yevna Rosenbaum happy) is here. There is good reason to be hesitant to take advice from anyone who fights against seat belt use. You can download the Reason Foundations full PDF (see page 23 for the seat belt issue) and find more info on the report here.