Prices prompt projects' postponement
Consumers have to hope the big spenders in Washington and Oklahoma City who are wringing their hands over the revenue drop in the federal highway trust fund accounts really understand what is happening. According to recent reports, federal highway officials notified states last Friday to make adjustments in future projects.
The overall result is that some families, as we enter the holiday season, may be faced with laid-off breadwinners.
Oklahoma Transportation Commission members on Monday delayed more than 30 potential construction projects after learning of the federal cutbacks. ODOT's action postpones $80 million in projects that were awarded in August and could delay awarding nearly $60 million in projects in September, ODOT said.
Sen. Jim Inhofe, who is running for re-election, has called on Senators to restore more than $8 billion in revenues diverted from the trust fund in 1998 to the general fund. That could go a long way toward keeping awarded project and going and preserving jobs. The House passed the bill restoring highway funds from the general fund before its August recess.
While some have called it a bailout of the highway funds, it isn't. Those funds should never have been diverted in the first place. Their sources were fuel taxes. Oklahoma has previously diverted highway funds, too.
The larger issue is one that the big spenders should look at. Why have the tax revenues declined? It's because the price system works. As the price of fuel increased this summer based on supply, demand and speculators manipulations, consumers bought less fuel. So tax revenues fell.
That lesson is important as potential office holders discuss problems and contemplate raising taxes. The surest way to reduce revenues is to raise prices or taxes. The fuel prices prove it. When the big spenders start talking about raising taxes, be sure to remind them of why it is a bad idea.