Allocating Federal Gas Tax Receipts: Are Commuters Losers?
The Environmental Working Group (EWG), a prominent environmental watchdog organization, has come out with an intriguing study examining metropolitan areas that receive significantly less in highway funds than they pay in gas taxes. The EWG study found "that commuters in 176 metropolitan areas paid a total of $20 billion more in federal gas taxes than they received in federal highway trust fund money for both transit and highways from 1998 through 2003."

The two areas with the largest discrepancy between taxes paid and federal highway funds received were Los Angeles-Riverside-Orange County and Dallas-Fort Worth. Both areas paid over a $1 billion in taxes than their received in federal highway funds between 1998 and 2003.

According to EWG, the "result of this funding shortfall is increased traffic congestion, fewer transit options, and more sprawl in outlying areas that is paid for by the suburban drivers who are increasingly stuck in traffic in and around our nation's cities."

Interestingly, EWG states that "the disparities at the local level have received relatively little consideration on Capitol Hill although many members of Congress are fighting to ensure that states receive federal transportation funds equivalent to what the states contribute in gas taxes. Local transportation spending, however, has a far greater impact on congestion, air pollution, and sprawl."

The EWG study goes on to note that in "many states, including Texas, Florida, Colorado, Arizona, California, and Louisiana, virtually every large metropolitan area is a major money loser, while rural areas, in total, are significant winners."

EWG's recommendation is that gas tax "revenues should go to diversify transportation options in sprawling metro areas. ... To ensure that gas taxes are fairly spent and not used to subsidize new highway expansion at the expense of areas with the greatest need, Congress should adopt a provision in the current federal transportation law requiring that metropolitan statistical areas receive at least 95 percent of the gas tax revenues that they pay to the federal highway trust fund."

Winston appreciates EWG's concern for the plight of suburban commuters. Obviously, caution needs to be exercised before placing additional federal restrictions on State spending. However, the EWG study raises an interesting issue that deserves careful consideration.