Why Ronald Reagan Was Right on Infrastructure
Take a second and listen to what President Ronald Reagan had to say about America’s roads and a highway user fee:
“America can’t afford throwaway roads or disposable transit systems. The bridges and highways we fail to repair today will have to be rebuilt tomorrow at many times the cost…
“ So, what we’re proposing is to add the equivalent of 5 cents per gallon to the existing Federal highway user fee, the gas tax…
“The program will not increase the Federal deficit or add to the taxes that you and I pay on April 15th.
“ It’ll be paid for by those of us who use the system, and it will cost the average car owner only about $30 a year. That’s less than the cost of a couple of shock absorbers.”
Believe it or not, those are not the words of Nancy Pelosi, Chuck Schumer or Barack Obama.
They’re the words of President Ronald Reagan, delivered during a radio address to the nation on November 27, 1982, in which he laid out his vision for maintaining America’s network of roads and bridges.
Those words are as true now as they were then. Great nations — especially with a growing economy like ours — are sustained by strong infrastructure. That requires investment.
President Reagan was right when he said a user fee — which he increased twice while in office— is the best way to invest in roads and bridges.
He was right because the user fee is the most efficient, conservative and viable solution to generating real revenue that can be invested immediately in roads and bridges.
Consider the following:
•99 cents of every dollar collected from a user fee is spent directly on the intended purpose of maintaining roads and bridges.
Compare that to other methods of infrastructure funding, like tolling — where as much as 35 cents of every dollar is wasted on administrative and overhead costs rather than on road maintenance.
There’s nothing “conservative” about squandering 35% of taxpayer revenue.
•The Build America Fund would generate $340 billion in new revenue over ten years, and cost the average motorists only $2 per week. Compare that to the $1,500 that motorists lose every year to wasted gas, lost time and vehicle maintenance as a consequence of our crumbling roads and bridges — and that 5-cent user fee promises to save motorists hundreds of dollars in return.
Or, compare it to the costs of tolling. Right now, on Interstate 66 outside Washington, D.C., motorists are paying as much as $47 to drive seven miles, one day, one way. That is literal #HighwayRobbery.
There is nothing “conservative” about being charged $47 to drive seven miles on public highway.
•A fuel user fee is collected at the wholesale terminal rack, well before gasoline reaches the retail pump. There are approximately 200 terminal operators across the United States, where transportation fuel is picked up by tank trucks to be hauled to gas stations.
Under a user fee plan like the Build America Fund, these terminal operators would be charged an added 5-cent fee per gallon of fuel sold each year, phased in over four years. This gradual phase-in means the fee is baked into the wholesale price of gasoline, softening the impact on the consumer.
Often mislabeled as a “gas tax,” a user fee does not add a penny to the taxes you pay on April 15, nor does it add a penny to the federal deficit.
•We are currently borrowing tens of billions of dollars annually from China to pay for our roads and bridges — and that number is on the verge of getting much, much bigger. We must generate revenue to invest in our infrastructure, less we pass on even greater debt to our children and grandchildren.
Even worse, many Public-Private Partnerships (a code word for tolls) are operated by multi-national corporations, putting Americans’ hard-earned dollars in the pockets of foreigners.
There’s nothing “conservative” about borrowing from China to pay our bills.
Here’s the Bottom Line:
Those looking for a conservative way forward should look no further than their hero, Ronald Reagan. He would agree, a user fee is neither regressive nor a “gas tax” — it is the fiscally conservative solution to fixing our infrastructure.
“Perhaps most important, we will be preserving for future generations of Americans a highway system that has long been the envy of the world and that has truly made the average American driver king of the road.”
-President Ronald Reagan, Nov. 27, 1987