When Uncle Sam stops being Uncle Sugar Daddy

Bennett, infrastructure, highways
Scott Bennett is director of the Arkansas Department of Transportation.

By Steve Brawner

President Trump has talked about spending up to $1 trillion on highways and other infrastructure projects, but most of what would be spent in Arkansas wouldn’t come from Uncle Sam.

Instead, it would be up to Scott Bennett, and others like him, to find the money elsewhere – mostly from Arkansas taxpayers and drivers.

Bennett, director of the Arkansas Department of Transportation, met at the White House Aug. 31 with Secretary of Transportation Elaine Chao, Office of Management and Budget Director Mick Mulvaney, and other state transportation directors.

“One of their guiding principles is leveraging private investment. … They’re looking for $200 million projects where you put together all the state, local and private investment you can, and you’re still $20 million short. Those are the projects that they want to fund,” Bennett said.

“Devolution” and public-private partnerships

The idea of pushing projects down to the state level is known as “devolution,” and it’s something Republicans talk about, though sometimes quietly. “Public-private partnerships,” where private companies perform traditionally public services, is also a trendy idea sometimes embraced by both parties. Toll roads are often operated by private companies, and so are prisons.

This would be a reversal of past federal highway policies, when the federal government paid for most of the costs of projects it funded. Bennett would take the $20 million, of course, but finding the other $180 million could prove difficult. Moreover, the thing about taking Uncle Sam’s money is it comes with Uncle Sam’s strings attached. So another of the Trump administration’s guiding principles is to cut some of those strings.

Bennett’s department has tried for years to make up for funding shortages that were confirmed by the Legislature’s Division of Legislative Audit as being $478 million annually. Basically, the department is receiving about half of what it needs, that report said.

Many causes for the shortfall

Why the shortfall? State and federal gas taxes haven’t changed for decades, but vehicles are becoming more fuel-efficient. That means drivers are paying less in gas taxes – or none if they drive electric vehicles. Lawmakers don’t want to raise the gas tax, which polls have shown gets limited support in Arkansas. While the department is receiving less from the gas tax, it’s paying more in construction costs. The money it does receive is split 70-15-15 with cities and counties.

There have been attempts to bolster highway funding through general revenues, but those pay for other priorities that have powerful defenders. Unlike highways, which can be ignored for a while, those priorities – schools and health care in particular – have been in states of emergencies, real or court-ordered.

Meanwhile, some legislators don’t like how highway funds are spent. The Highway Commission is constitutionally independent, so legislators have no control over where those dollars go, and some believe the money doesn’t follow the cars – particularly those in their own districts.

In his three years in office, Gov. Asa Hutchinson has cut state taxes while looking to the federal government for extra dollars – in health care and, last year, for highways. Through the five-year Fixing America’s Surface Transportation Act, the state gets $200 million annually in federal funds by spending just $50 million each year of its own, which legislators voted to do last year.

In the future, Uncle Sam may less often play the role of Uncle Sugar Daddy. If Arkansas wants to improve its own roads, it will have to find its own sources of revenue. The Highway Commission – Bennett’s bosses – is deciding whether or not to seek a ballot initiative to fund highways that would be presented to voters in 2018.

The big picture

The bigger picture is this: On Monday, the national debt for the first time passed $20 trillion. That’s about $61,000 for every American. At some point, Congress and the president could decide that devolution is one way to slow the growth. After all, it lets them avoid cutting spending or raising taxes. Whether it’s highways or health care or whatever, they’ll push the responsibilities – and the hard choices – to the state level.

There’s nothing inherently wrong with devolution, but Arkansans should prepare for it. When government provides a service, somebody has to pay. Ultimately, it’s the taxpayers – today’s or, too often, tomorrow’s.

© 2017 by Steve Brawner Communications, Inc.

4 thoughts on “When Uncle Sam stops being Uncle Sugar Daddy

  1. “the thing about taking Uncle Sam’s money is it comes with Uncle Sam’s strings attached. So another of the Trump administration’s guiding principles is to cut some of those strings.”
    What are the strings that come with federal money? Which of these does the Trump administration think need to be cut?

  2. Tax the Big Truck Insurance Company’s They are charging Truck owners 5000-8000 per Truck an then the Trailer Insurance cost another 1500-2500 each per year , Their are
    15 million commercial Vech in the USA using our road ways ,
    The other thing that can be thought of is Toll roads this is done a lot in the northern states an their roads are in very good shap where the toll roads are in place of course now with the new Nav systems are programmed to route you around them if you wish
    But If you take that option you you go over narrow rough roads that take you longer .
    But I would not Tax the Truck owners becaused they are already stressed to the max because with low paying loads an repairs , The other funds could come from parts Tax , an Tire Tax , Car Tax , spread it out so that it is not all place on one industry or product
    But then place a law on the books that no other program can borrow money’s from the
    High way fund no matter who wants the money an that this money has to be used yearly on high ways not just interstate high ways , The Tax payers are wise to the bait an switch thing vote in a Tax for high ways to be repaired an the other agency’s start eying that fund growing then the next thing you know the funds are all borrowed out of it an used on some bleeding heart fund like let’s fund frogs for vacation act then your knocking on their door again for the same money they gave you already to fix the road ,

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