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Author Topic: Federal Highway Funding Research  (Read 6706 times)

Lars H

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Federal Highway Funding Research
« on: February 08, 2003, 07:15:18 am »

Implicit in many of the FSP proposals is the ability to tell the Federal gov't to keep its federal highway funding, thank you very much, and all of the strings that are attached to it.  I applaud this proposal, and look forward to the erasure of the end run around the IXth and Xth Constitutional Amendments.

At the same time, it's important to acknowledge the reality that each of the candidate Free States contains hundreds or even thousands of miles of Federal highways.  The specter of weeds growing in the roadways and frost heaves finishing off the suspension of your neighbor's new Lexus would dramatically undermine our case that Federal money comes at too dear a price.  Since we're unlikely to immediately reach the "sell the roads and legalize crack" stage of achieving a libertarian utopia immediately, there will be a period in which we are obliged to come up with a means of maintaining the roads in our new home state.  

Given all of this, it seems to me that one of the data points we should be mindful of as we make our selection of a Free State is what size of road-maintenance obligation we're undertaking.  Drawn from the DOT's Federal Highway Administration Web site, here are the mileages of "National Highway System" roads contained in each of the Free State candidates:

State Total NHS Mileage
Alaska
2,119
Delaware
325
Idaho
2,380
Maine
1,283
Montana
3,892
New Hampshire
810
North Dakota
2,750
South Dakota
2,943
Vermont
718
Wyoming
2,907

The 2001 GAO Federal Highway Funding Report lists the following Federal highway funding levels, averaged for for the five fiscal years 1996-2000 (to try to minimize the impact to this analysis of extraordinary funding) in our candidate states:

State Average Federal Funding, FYs 1996-2000, $,000,000
Alaska
239.9
Delaware
100.4
Idaho
155.9
Maine
126.5
Montana
198.1
New Hampshire
117.5
North Dakota
151.7
South Dakota
165.7
Vermont
98.8
Wyoming
164.9

Note that the Federal funding levels bear little relation to the mileages listed in the first table.  This is due to a Byzantine set of funding formulae hammered out in the course of Congressional negotiations.  They reflect various rules that are designed to ensure that relatively wealthier states do not wind up excessively subsidizing their less-affluent brethren, as well as pork barrel priorities and other backroom deals.

These funds are earmarked for a variety of purposes, including basic road maintenance, new construction, bridge maintenance and replacement and so on.  If we stipulate that these activities are by and large necessary (a detailed analysis of the spending may be in order to determine the validity of this stipulation), then we should look at what the per-capita cost would be in each of the Free State candidates to do a straight replacement of these funding levels:

State Average Federal Funding, FYs 2000-1996, $ per capita
Alaska
382.63
Delaware
150.68
Idaho
120.45
Maine
99.24
Montana
219.60
New Hampshire
95.10
North Dakota
236.22
South Dakota
219.49
Vermont
162.31
Wyoming
333.99

The first observation that springs to mind is just how cheaply the Federal gov't purchases our compliance with its multitude of minute regulations and meddlings that are tied to highway funding!  Looking at the numbers, a few things jump out.  The best-funded three states - Alaska, Wyoming and North Dakota - have stunningly high levels of funding (averaging more than 3 times as great) when compared to the three lowball states - New Hampshire, Maine and Idaho.

Some of this is not surprising -- road building and maintenance are complicated tremendously by permafrost and other extreme conditions that obtain across Alaska. (A powerful Senate delegation doesn't hurt, either!).  New Hampshire's road departments are famous for its frugality (anecdotes about the sale of roadkill pelts to fund operations come to mind).  

The picture becomes even more interesting when you examine the taxation side of the Federal highway funding scheme.  Highway funding is generally drawn from the "Federal Highway Trust Fund," which comes from Federal taxes related to highway usage (primarily, Federal motor fuels taxes).  Following is the average of FHTF payments from the Free State candidates for fiscal years 1996-2000 (drawn from "Table FE-221" documents on the DOT Web site):

State Average FHTF Payments, FYs 1996-2000, $,000,000
Alaska
54.4
Delaware
71.7
Idaho
149.3
Maine
137.5
Montana
120.8
New Hampshire
116.5
North Dakota
89.0
South Dakota
89.2
Vermont
68.4
Wyoming
130.3

While it's highly improbable that the Free State could easily persuade the Federal gov't to cease collecting these payments, it is exceptionally interesting to examine the per capita Federal highway funding numbers net of these payments:

State Average Net Federal Funding, FYs 2000-1996, $ per capita
Alaska
295.89
Delaware
43.07
Idaho
5.03
Maine
(8.59)
Montana
85.68
New Hampshire
0.80
North Dakota
97.57
South Dakota
101.38
Vermont
49.99
Wyoming
70.02

Maine is a net donor state, and New Hampshire and Idaho receive almost negligible per capita Federal subsidies when you consider the full funding picture.  Alaska's losses when the Free State turns away Federal highway funding are the most profound, even when the states' contributions to the FHTF are taken into consideration, and the Dakotas also both fare relatively poorly in this analysis.

If nothing else, these figures may prove useful in the fight to persuade the Free State's overall population that the end of Federal highway funding is not the end of the world, regardless of which state is finally chosen.  Being able to point out to a native Mainer that she pays almost $9 a year for the privilege of having her state's Constitutional rights trampled on would have to be strong point in that discussion!

However, when examined from the point of view of making a selection for our Free State vote, the most important data to consider is that in the third table above -- the per-capita funds that we will have to replace (or cut, to the highly visible detriment of our roads).  Turning away Federal highway funds in a Free State of Alaska would mean shouldering a substantial burden; Wyoming is barely better.  Only Idaho among the western candidates is even comparable to the eastern choices.

Certainly, this should not be the conclusive factor when we make our final choices, but it should be an important one, given how central to our overall strategy the tactical treatment of Federal highway funds is.  In order to ensure the eventual success of the Free State Project, this is one criterion which must be kept in mind.

If you would like links to my original sources for this analysis, or get a copy of the spreadsheet that I used to crunch the numbers, please drop me a line.
« Last Edit: February 08, 2003, 07:22:26 am by Lars H »
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JasonPSorens

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Re:Federal Highway Funding Research
« Reply #1 on: February 08, 2003, 04:07:13 pm »

Federal highway funds are an important factor to consider, certainly.  They are of course part of the "federal dependence" variable we use, but they're "special" in the sense that we would have to reject them without necessarily getting much in return.  It's possible that we could successfully sue to eliminate the federal gas tax in our state if that money is not being used on our highways, but we may not want to bank on that.

At the same time, it's probably true that Alaska and Wyoming in particular have enough mineral wealth to pay for their own highways for a time.  (Also, the Western states probably have more highways than they really need, given population density there.)  This is especially true if these states decide to take the extraordinary but legally defensible step of seizing illegally held federal lands in-state.  For every tit there is a tat. ;)  Of course, we'd have to assess carefully the benefits and costs of each action.  Not having as much federal highway funding is, ceteris paribus, a good thing for us: one less obstacle in our path.  At the same time, having a lot of federally owned land in our state is, ceteris paribus, a good thing for us: one more tool in our belt.
« Last Edit: February 08, 2003, 04:07:52 pm by JasonPSorens »
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Lars H

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Re:Federal Highway Funding Research
« Reply #2 on: February 08, 2003, 06:34:43 pm »

This is especially true if these states decide to take the extraordinary but legally defensible step of seizing illegally held federal lands in-state.
We must restrain our tactics in confronting the Federal gov't to those that will not draw an armed response -- we cannot win in any such scenario.  Seizing property that the Federal gov't claims, regardless of the legitimacy of that claim, is a sure way to spur such a response.

Worse than the death and destruction that have surrounded such confrontations with the Federal gov't in recent years is that the national perception of the opposition movements involved is that "they had it coming."

In order for the Free State to ultimately succeed in the goal of moving the ball back in the direction of liberty, we must be seen nationally as a credible, rational movement.  Talk of property seizures, military defensibility and the like does not present us in such a light.
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JasonPSorens

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Re:Federal Highway Funding Research
« Reply #3 on: February 08, 2003, 08:41:53 pm »

Well, that's the reason I said we must carefully consider our options.  I don't believe it would draw an armed response, however.  Likely just a court battle.
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exitus

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Re:Federal Highway Funding Research
« Reply #4 on: February 27, 2003, 06:48:59 am »


Note that the Federal funding levels bear little relation to the mileages listed in the first table.  [ . . .  ]

While it is true that federal funding bears little relation to the actual number of miles of roads that ribbon each state, there does seem to be a relation that exists between those roads and funding outside of complicated charts and backroom negotiations in Washington D.C.   The biggest and most obvious reason to me is that some states have very significant trans-continental highways running through them:

Wyoming is a huge example of this, being the land-linked hub that it is, bearing most of the traffic that runs through the center of the country on Interstate- 80.  In fact, there are about one million tourists that come to visit Yellowstone National Park every year, which is a number of people that exceeds twice the state's resident population, accounting for significant use of the state's highway system.

In trying to make sense of these numbers, there does seem to be some relation between having more compact urbanization and the larger cities causing higher costs of highways while the more rural western states having less cost per highway mile.  If we take the State Average Federal Funding for FY's 1996-2000 and compare it to the State Total NHS Mileage, borrowing the numbers from Lars H's excellent post above, and then measure it in units of miles per dollar we can get the following comparison,


How Far One Million Dollars Can Go In Each State:
         

[tr][td]Montana[/td][td]
19.7 miles
[/td][/tr]
[tr][td]North Dakota[/td][td]
18.1 miles
[/td][/tr]
[tr][td]South Dakota[/td][td]
17.7 miles
[/td][/tr]
[tr][td]Wyoming[/td][td]
17.6 miles
[/td][/tr]
[tr][td]Idaho[/td][td]
15.3 miles
[/td][/tr]
[tr][td]Maine[/td][td]
10.1 miles
[/td][/tr]
[tr][td]Alaska[/td][td]
8.8 miles
[/td][/tr]
[tr][td]Vermont[/td][td]
7.3 miles
[/td][/tr]
[tr][td]New Hampshire[/td][td]
6.9 miles
[/td][/tr]
[tr][td]Delaware[/td][td]
3.2 miles
[/td][/tr] [/b]
[/table]

Urbanization may partly explain some of these differences when looking at Delaware and Alaska in comparison to Wyoming and the Dakotas simply for the fact that multi-lane highways,  by-passes multi-lane over-passes and all the infrastructure used in highways that are used for heavy commuting tend to be more expensive, especially when built from concrete, as they tend to be in large cities.

Urbanization does not explain, however, why there is such a huge decline in cost efficiency of over 50% from Idaho to Maine which have somewhat similar populations and urbanization levels.  Perhaps the answer can be found in the politics of highway building, which is often controlled by deep-pocket special interests and this is compounded when labor union contracts and special pro-rata hiring practices are enforced,  forcing higher expenses on to the road projects.  Except for Montana, those states which cost more per mile after Idaho do not have Right-to-Work Laws where the power of labor unions is voluntary instead of enforced through force.
Quote
While it's highly improbable that the Free State could easily persuade the Federal gov't to cease collecting these payments, it is exceptionally interesting to examine the per capita Federal highway funding numbers net of these payments:


When the federal government came up with the nation-wide freeway system in the early 1950's, it was sold as a defense measure, first as a means of "clearing-out major cities in the event of thermo-nuclear war". Because until then, roads were primarily the obligation of state and local governments.  States had very little influence in where the federal planners and surveyors would decide to lay those first miles of highway systems.  Eventually, states would have more direction in the decisions of highways systems as their building became less of a defense measure and more decentralized, while depending upon the taxation money of the federal govenment.  The fact is, states have major highways in them because of where they are strategically along land routes, and less because of any politics.

Measuring highway funding on a per-capita use is a poor measurement of state government's largess, since the nation's highways are used by the nation at-large, not necessarily by the population within the borders of that state's portion of highway, except when talking about major improvements in highway infrastructure in the larger cities, and the business loops and accessways that tie them to interstate highways.  I haven't bothered to do it, but it would be interesting to find out how expenditures per mile relate to population size that way.

Much the same thing could be said for actual number of government workers versus per- capita percentage.   Every state has a certain amount of those government workers that are there no matter how big or small the state is, sort of a fixed-overhead price of doing business under the status quo.  Trying to compare numbers that are not a dependant variable to population on a per capita basis is the wrong way to look at it, because on that basis California would look like a small- government state!  

Quote
Implicit in many of the FSP proposals is the ability to tell the Federal gov't to keep its federal highway funding, thank you very much, and all of the strings that are attached to it.

Also is the viable option of telling the federal government to:

" keep your federal highways, and all of the strings that are attached to them, thank you very much."

 Our state could very well drop support of select interstate federal highways and let the feds collect a toll on their shoddily-built highways while we let capitalist entrepreneurs build superior freeways made from recycled tires like it is done in Europe and employ other means of transit like magnetic bullet-train monorails or even build tunnel-ways under the fed's highways.
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Zxcv

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Re:Federal Highway Funding Research
« Reply #5 on: February 28, 2003, 12:34:37 am »

I've heard many times that strings are attached to these highway funds, but does anyone have a list of the strings? What sorts of things do the feds force on the states for the use of these funds? The more things there are, the more easily we will be able to sell the idea within our state that we should dump the highway funds.

Quote
These funds are earmarked for a variety of purposes, including basic road maintenance, new construction, bridge maintenance and replacement and so on.  If we stipulate that these activities are by and large necessary (a detailed analysis of the spending may be in order to determine the validity of this stipulation)...
Boy, I sure wouldn't make that assumption! Government is known for waste, and the feds are the most wasteful of all. So the replacement costs might not be as high as you think.

BTW, here is a possible scenario for dumping this funding. First, we get our people in control of the legislature.  ;)  Then we make a formal request that the federal government eliminate gas taxes, in return for which we will reassume all the duties of maintaining the roads. Couple this with an analysis casting doubt on federal control of these highways in the first place, especially since the original military justification has by now been satisfied. Of course, the feds will ignore this request.

Then, start violating the strings attached to the highway funds, and ship to Congress an analysis describing the unconstitutional nature of attaching such strings to an already unconstitutional highway program (it shouldn't be too hard to make the case this goes far beyond the Constitutional mandate). Include another request that the gas taxes be eliminated and the federal funding ended.

As you can see, this leaves them in a delicate position. No one, I believe, has ever called their bluff on these strings before. They may not relish the thought of going to court to defend the cutoff of federal funds to our state on the basis of violation of these strings, since they have much to lose if the decision goes the wrong way. They may well decide that we are a special case, no one else will ever ask to have their funds and taxes eliminated, and they may in fact go along with our request in order to avoid having their day in court. Of course the other alternative, keeping us funded while ignoring our violation of the strings, will be just as unpalatable.

Finally, if they do stiff us on the funds and keep the taxes in place, we can keep the tax collections in an escrow fund until they cry "uncle". I don't know the mechanism of tax collection, but it may already go through the states, or could be made to go through it via the passage of a law (if the latter, it would behoove us to do this as a first step).

So I think it is not actually that unrealistic to think about getting rid of these funds and taxes, as long as we "get our ducks in a row" first.

FYI, this was something being pushed by a Senator Duke in Colorado around 1995, and got some play in various western states. Here's a quote I found from some Nevada legislative committee:
http://www.leg.state.nv.us/68th/minutes/STR223.txt
Quote
"When a state passes this resolution proclaiming its sovereignty that  state may then claim exemption to most federal mandates under the  10th amendment of the United States Constitution.  This is what
happened with New York vs United States in 1992.  The federal  government was attempting to mandate that the state of New York accept radioactive waste for disposal .... by having claimed  sovereignty, the state is in a position to select those mandates they
will follow not by choice and not by edict.  A  sovereignty resolution  does not preclude any state from participating in any program they  choose, but the proponent may no longer claim it is a federal
mandate, we have to do it.  Each legislator, in compliance with his or her oath of office, must then examine closely before passage, the constitutionality of any law being considered.  Needless to say, the
feds may be unimpressed with the statement of sovereignty and attempt to impose economic sanctions against the state, as have become their pattern over the years.  In anticipation of this, each state should also create escrow funds for each federally funded major program.  That is, the states will collect major sources of federal funds such as gas tax and income tax on behalf of the federal government and make monthly disbursements to the feds from these
escrow funds .... "

Here's a Walter Williams article:
http://www.gmu.edu/departments/economics/wew/articles/95/states-R.htm

You know, this stuff happened 8 years ago. I'm wondering what the outcome was? I tried to get in touch with this Senator Duke to find out but have not had any luck. Maybe someone has some idea to find out how this rebellion played out? Maybe Walter Williams knows, and he's our buddy, isn't he?  :)

Say, is there something in this thread I ought to throw into the big spreadsheet? The one that looks best to me is the "net federal funding per capita", despite exitus' misgivings. Or maybe we should just do "net federal funding" and take the per capita out of it, since it is a block grant to each state government (actually, that does start to make some sense to me). I know we already have the dependence variable, but if this is one of the main paths for federal control of the states, it wouldn't hurt to call it out separately, would it?
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exitus

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Re:Federal Highway Funding Research
« Reply #6 on: March 04, 2003, 03:10:20 am »


The one that looks best to me is the "net federal funding per capita", despite exitus' misgivings. Or maybe we should just do "net federal funding" and take the per capita out of it, since it is a block grant to each state government (actually, that does start to make some sense to me).
 My greatest misgiving over comparing 'Net Federal Funding Per Capita' between the states is with the per-capita basis:  

First of all, these federal highways connect the nation, not just the state within a certain boundary.  These highways are built and maintained because of the traffic that travels upon them and how they are strategically needed for transportation needs for the whole country, not just within a state.  Frequently signs across this nation proclaim, "state road test in progress" with a couple of cables strewn across the roadway as part of a 'road census'.  The data that states collect is used, in part, to determine federal funding, it is a reflection of how much the roads are actually used and how important they are to the transportation and commerce of the country.  Don't look-down upon any state for having a central and important location where roads were built and highly regard another state for being out-of-the-way of important thoroughfares.
   
This brings me to another concept:

Implicit in many of the FSP proposals is the ability to tell the Federal gov't to keep its federal highway funding, thank you very much, and all of the strings that are attached to it.  I applaud this proposal, and look forward to the erasure of the end run around the IXth and Xth Constitutional Amendments.
While we would certainly enjoy cutting our state loose from the federal strings that bind and gag in highways, it is important that this decision be done in a logical and consistent manner; there are degrees of wrongful taxation, the least grevious manner of taxation is use tax, where you pay for what you use.  A gasoline tax is an example of an indirect form of use taxes, because people buy gasoline, they are taxed on it, money gets funneled about, and eventually it helps pay for the road that the vehicle that burns the fuel will drive upon.  It would be a mistake for a politician seeking liberty to foist the taxation from the indirect user-tax found in fuels on to the general population, even if at a more local level in the state.

Preferrable, would be some efficient yet privacy-preserving form of toll collection poised at the entrances to highways.  In light of this argument, highway money per capita is a useless figure in comparison of the states, since it will not be the state's population that will be expected to exclusively pay for the highway.  For states like Wyoming, where more outsiders use the highways than residents, it just makes sense.  As it is now, that is largely already paid for by out-of-state visitors as they purchase fuels within the state to drive upon those same roads.

I find money spent per highway-mile a much more interesting measurement, as this shows both how efficient the state can use those resources and how expensive is the existing infrastructure built into those highways.  Naturally, of course, this measurement has its flaws, as those states which have more miles of highway tend to be more efficient because of scale of production and the lower costs of rural highways over urban.

So the question comes down to this, is having highways a resource or a liability for a free state?  I proposed the following simple answer to that question:

A state can easily just tell the federal government to, "keep your federal highways, and all of the strings that are attached to them, thank you very much."

Our state could drop support of select interstate federal highways and let the feds collect a toll on their shoddily-built highways while we let capitalist entrepreneurs build something superior, if needs be, even build tunnel-ways under the fed's highways!
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Zxcv

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Re:Federal Highway Funding Research
« Reply #7 on: March 04, 2003, 11:35:59 am »

Quote
So the question comes down to this, is having highways a resource or a liability for a free state?  I proposed the following simple answer to that question:

A state can easily just tell the federal government to, "keep your federal highways, and all of the strings that are attached to them, thank you very much."

Our state could drop support of select interstate federal highways and let the feds collect a toll on their shoddily-built highways while we let capitalist entrepreneurs build something superior, if needs be, even build tunnel-ways under the fed's highways!

You lost me there, exitus.

First, I don't know what you mean by "Our state could drop support of select interstate federal highways". The state (government) generally does not support these highways; they are paid by federal funds collected directly from the gas retailers or wholesalers, right?

Second, it just won't fly politically to let them keep collecting the taxes and on top of that having to pay tolls on those roads as well. Getting dinged twice for the same thing will not make people impressed with us. People in these states do use the federal highways as well; they are not just for outsiders travelling through.

The answer to your question is, yes, highways are an asset. Even the currently federal ones. We just want to keep maintenance, control and payment for them local to the state, and get rid of those strings. I agree the gas "tax" is better than a broad-based tax, but we are not talking about the latter. We are talking about raising the state gas tax (replacing the fed tax) to collect additional revenue for maintenance of the highways now run by the feds.

Nobody is going to be building tunnels under highways, that is tremendously expensive. And roads are (generally) not going to be private, although of course we shouldn't discourage this possibility. But this is one item of libertarian dogma I find dubious. If you ask me, the best practical case is state (and county, and city where appropriate) funding and control of the highways in the state, with the funds all coming from the gas tax.

However I'd also say that this stuff belongs pretty low on our list of priorities.
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