Privatizing Roads

A major shortcoming of the deficit reduction plan concocted by the president’s Fiscal Commission is that it assumed that the federal government should continue doing everything it currently does. For example, the plan proposed a 15 cent per gallon increase in the federal gasoline tax to fund infrastructure projects. But why not allow the private sector to play a greater role in financing and maintaining infrastructure like roads?

That’s the topic of a new Reason TV video:

In the video, Bruce Benson explains that America has a strong history of privately-provided roads. Unfortunately, because government has come to dominate road construction, most citizens probably don’t stop to consider that the private sector can provide superior alternatives.

As Benson points out, a chief problem with government roads is that they foster armies of lobbyists and special-interests who agitate for more and more taxpayer money. Policymakers try to steer transportation dollars to their districts and states, which inevitably results in money going to projects that make little economic sense. With a private road, it has to make economic sense or it won’t get built.

Another problem is that the federal government places costly burdens on the state and local recipients of the funds. ABC News recently had story on a new federal regulation – contained in an 800 page book – that requires local governments to change the fonts on their street signs to make them easier to read. The article says that the requirement will cost Milwaukee $2 million alone, or twice the city’s annual traffic control budget.

Not surprisingly, special-interest groups had a hand in getting the federal government to implement the regulation:

The American Traffic Safety Services Association -- which represents companies that make signs and the reflective material used on them -- lobbied hard for the new rules.  And at least one key study used to justify the changes was funded by the 3M Corporation, one of the few companies that make the reflective material now required on street signs.

See this Cato essay for more on why federal highway funding should be abolished.