The jaw-dropping fall in oil prices over the past few months has many experts scratching their heads as to what happened. It also has others looking for ways that they can use it for their own ends. Car makers seem to be turning back to gas guzzlers, though fortunately this isn’t always the case. But in America, there’s one group of people who can always be counted on to make the worst of any situation, and this time around, they didn’t disappoint. I’m talking, of course, about the Koch Brothers.
The Koch Brothers are nothing if not polarizing. Owners of a multi-billion dollar business empire whose primary income comes from a strange mixture of petroleum production and complex financial management services, they have become perhaps the most visible symbols of the influence of large-scale spending in electoral politics (they’ve promised to spend nearly a billion dollars in the 2016 elections).
Roundly criticized by the left, they have their fair share of defenders among conservative and/or libertarian circles, though not everyone in these groups are happy to have them on their side. It’s easily conceivable that those interested in urban planning issues might at least theoretically go both ways on the Koch Brothers (there are plenty of conservative urbanists after all). But when you look at how they’re exploiting the gas price drop, it’s hard to imagine anyone who supports key urban planning issues like walkability, public transit, building vibrant neighborhoods, and urban sustainability being on board.
A couple of weeks back, an editorial appeared in the Los Angeles Times by Tim Phillips, the president of Americans for Prosperity. Though technically not part of the Koch Brothers’ company, Koch Industries, the Kochs do supply much of the group’s funding. Additionally, the group just so happens to back positions that would be quite profitable for Koch Industries. How convenient. It’s hard to imagine that Koch Industries, if not the Kochs themselves, don’t play an active role in determining the proposals that Americans for Prosperity ends up backing.
What exactly is Phillips arguing for? He begins his piece with the puzzling assertion that lower gas prices are the equivalent of a “de facto tax cut”. What does that mean? If there’s a sale on designer shirts at your local department store, is that a de facto tax cut? If you find a few crumpled up bills in your jacket pocket that you had forgotten about, is that a de facto tax cut too?
To be fair to Phillips, I think I know what he’s getting at, even if his analogy leaves something to be desired. Lower gas prices “feel” like a tax cut, because unlike buying new things, car users have to buy gas just to continue the same activity they’ve already been doing, similar to taxes. There’s just one problem with that, and one that goes beyond designer shirts: it completely ignores people who get around not by private cars but by walking, biking, transit, or even certain cars that use electricity or alternative fuels. Maybe Phillips is unaware that these forms of transportation exist. But far more likely, Phillips is very aware of them, but doesn’t want to mention them in hopes of removing them from the public dialogue.
Next, Phillips criticizes certain legislators calling for an increased gas tax. Such a tax would “jeopardize” gains made by the poor and middle class, he claims. However, as he himself points out, more funds are needed for the Highway Trust Fund to become solvent once again. So what’s the solution? I’ll let Phillips explain it himself, though I’ve taken the liberty of adding a bit of emphasis:
The most frequently repeated reason [why congress wants to raise gas taxes] is that it would restore fiscal solvency to the Highway Trust Fund, which has been steadily losing money for years. But a higher tax isn’t the solution to this problem. Instead, Congress should direct the trust fund’s money to be spent solely on highways, rather than on the plethora of non-highway projects that it currently funds. If Congress made this simple change, the fund’s financial problems would be all but fixed overnight; it would be 98% solvent.
Put that way, the cuts don’t seem so bad. If all we need to do is just cut out the “plethora of non-highway projects” from the trust fund, it might be pretty easy. After all, we don’t know what those projects, and there’s a chance it could be some of that ominous “waste, fraud and abuse” we hear so much about on the news.
But, yet again, he’s conveniently left some facts out, and very important ones at that. That other spending isn’t for vanity projects tacked on by some renegade congressman to funnel money to his district. They’re helping to fund public transportation systems nationwide. So, when Phillips talks about cutting all those non-highway projects, he’s not talking about cutting something abstract projects floating in the air. He’s calling for the end of federal spending on public transit.
The Highway Trust Fund provides the lion’s share of transportation funding given by the federal government. According to the Washington Post, in 2013 the fund made available a total of $50 billion to the states. Of that amount, $43 billion was for roads and $7 billion was for transit; a bit of quick calculation shows that that’s 86% of the fund’s payouts going to roads and 14% for transit. Despite this seemingly low amount paid for transit, some anti transit advocates think that all transit funds should be cut, since much of the fund’s money comes from gas taxes. However, according to the Peter G. Peterson Foundation, that funding amounts to 87% of the fund’s total intake, almost exactly the same amount that is then doled out for roads.
Lately, the fund has been in the news, at least within politically savvy circles, when it faced a funding crisis last year. Though congress was able to agree on a solution to keep the agency solvent, it only lasted until May of this year, meaning that funding will soon be an issue for the agency once again.
Phillips seems to be aware of the trouble the fund will soon be facing again, and instead of addressing the issue of public transit in order to convince the public to cut its federal funding, he aggressively ignores its very existence. With gas prices low, he’s hoping that the public will be so ecstatic that they will completely forget the vital role it still plays.
I can think of two reasons why he’s doing this. First, the mere mention of public transit risks reminding the public of its positive aspects, something Phillips definitely doesn’t want to do. Surveys show that people in the US are warming up to public transit. Maybe that’s because of all the benefits it offers to the urban environment. It costs less money than a car, which is less of an advantage now that gas prices are lower but may come in handy if – or more likely, when – gas prices start to creep back up again. But its advantages go beyond mere cost. It cuts greenhouse gas emissions, which though Phillips as a climate change denier might not care about, 97% of climate scientists do (the few scientists who don’t agree are often funded directly by Phillips’ bosses at Koch Industries). And it is much less space intensive than car transport, freeing up valuable land for vital uses like housing, production, public space, or green space. Sure, plenty of people still love their cars, and mass transit still has its critics. But by and large, the general public seems to be moving toward transportation options that, while still leaving room for cars, also create workable transportation options via public transit, as well as biking and walking.
But there’s another reason Phillips may be doing this, which can be summed up in two words: Koch Industries. The mainstay of the company’s income comes from petroleum products, which naturally will do better if America’s sprawling status quo is maintained. Low gas prices may not be around forever, but they’re a convenient excuse to sabotage federal funds for transit. And if that happens, the progress being made toward viable public transit systems in many US cities will be stalled or reversed, leaving people no option other than car-based transportation even after gas prices go back up. This is bad for average Americans but great for Phillips and his bosses, the Koch Brothers.
Clearly, Phillips’ case for cutting federal transit funds is at best short sighted and at worst a calculated ploy to make his bosses money, that even conservative urbanists (not to mention a wide swath of the general population) would not be likely to support.
But what then is to be done about the Highway Trust Fund? The bottom line is that federal transit funding must be maintained. Many local transit agencies are struggling to get by, let alone expand to provide the level of service Americans deserve. Without the support these additional funds provide, many across the country will be denied the critical option of being able to get around by transit.
Ideally, funding for transit could be decoupled from the Highway Trust Fund, a fund that as its name suggests is primarily geared toward highways. But in the short term, maintaining the transit funds that exist within this fund is probably the more viable strategy.
This isn’t to say that increasing the gas tax is necessarily the best option politically. Bashing tax increases has long been an effective way for many politicians to score quick political points and smear their enemies. Though much of this is hollow grandstanding, to a certain extent this does make sense. There is such a thing as too much taxation, though this seems unlikely to happen in the fiercely anti-tax political climate of modern America.
However, though protecting working class and middle class families from excess taxation is a legitimate concern, so too is continuing to provide them the basic services that allow them good standards of living, and doing so requires sources of funding. This funding can’t just come from cutting spending. At some point it has to actually be generated.
Additionally, driving a car generates external costs, such as road maintenance, pollution, and wasted space. Since transit users don’t generate these effects at nearly the same rate as cars, it makes sense for car users to contribute to offsetting them at a higher rate. Over the years, the folks at Streetsblog have done a great job making the case for increasing the gas tax. Their points are well taken, and just as applicable when gas prices are low.
But there’s another way that funds could be freed up for transit, and one that Phillips definitely doesn’t want you to be thinking about. Every year, the federal government gives between $10 billion to $52 billion in subsidies to oil companies. These are among the most profitable companies in the world, and no one needs subsidies less than them. I could think of thousands of better ways to spend that money, but transportation and mass transit in particular, is near the top of the list.
It may be disheartening to know that groups like Phillips’s Americans for Prosperity have the deep pockets of people like the Koch brothers on their side. But all the dark money in the world still can’t change the fact that building good transit networks will create a major asset for everyday Americans, even when gas prices are low. Let’s hope that when it comes to transportation funding, congress will for once think of its voters instead of its donors.
Drew Reed is an online media producer and community activist specialising in sustainable transportation. He lives in Buenos Aires.