Tag: gas tax

Myth: driving is supported by user fees

Dan Allison1 Comment

Another myth promulgated by people who support roads over transit is that transit has to be subsidized while motor vehicles pay their way. “Transit, particularly rail transit, is very expensive to build, operate, and maintain. While driving is pretty much self-supporting through user fees, transit must be heavily subsidized by taxpayers.”

Roads for motor vehicles are anything but self supporting. For the state and federal highway system (from the interstates all the way down to some arterial streets that many people don’t realize are designated highways), gas taxes pay for roughly half of constructing those roads. Where does the other half come from? Out of our pockets, from the general fund, through income taxes and other fees. You may have heard that the federal highway trust fund is out of money, but highways are still being built. How is that possible? Well, money keeps getting dumped into transportation to make up for the lack of gas tax income. Though it is now down to 50%, if the gas tax is not raised, it will be a continually declining percentage until nearly all of our transportation funds come out of the general fund.

So if the gas tax doesn’t pay for maintaining roads, what does? Nothing! Very little money is being spent on maintenance, and our roads have deteriorated in a way that is obvious to anyone who drives, or rides a bike, or even walks. Politicians give lip service to fixing roads, but when it comes to spending money, it is all about big new roads and ribbon-cutting opportunities. Or even big new transit projects and ribbon-cutting opportunities.

For local roads, those paid for by counties and cities, very little comes from the gas tax. Counties and cities in California do not have gas taxes nor income taxes (though they do in some other states). So where does the money come from? Sales tax, and out of the general fund, which is mostly property tax. Self supporting? Hardly. Counties and cities do get some state and federal funds, some of which comes from gas taxes, but it usually is only for new construction (not that it has to be, but that is what is asked for and given), and it is a small part of what it takes to build and maintain local roads.

And then there are the externalties of a car-centric transportation system. Climate change, air pollution, sprawl, unemployment or underemployment for people who can’t afford to get to jobs, death and severe injury on our roads ($80 billion per year, for just injuries, not including fatalities), high portions of both family income and family wealth devoted to just one purpose, the car, deteriorating infrastructure, foreign wars for oil (if you think the war in Iraq was about freedom rather than oil and profit for Halliburton and Dick Cheney, you haven’t been paying attention).

All forms of transportation get some subsidy. Motor vehicles, bicycles, buses, trains, airplanes (the subsidy here is probably the highest percentage of any), all get subsidized. Though rail freight is subsidized far less than other modes, which is why it seems to not be competetive with road and air, when it would be if the playing field were level. The real question is whether the subsidies result in a transportation system that serves all citizens, and not just those who choose to drive or are forced to drive by a lack of choice. My opinion is that we have our priorities all wrong.

So why do we still keep spending money we don’t have on highways and roads, rather than a rational transportation system? The “asphalt lobby” as it is called. This is a network of engineers, construction companies, government workers, and politicians who profit incredibly from continuing to spend our money on their pet projects. AASHTO (American Association of State Highway and Transportation Officials) and ASCE (American Society of Civil Engineers) are probaby the most prominent proponents, but there are organizations and lobbyists too numerous to list. OK, I can’t resist: the Asphalt Paving Alliance, the Asphalt Institute, the National Asphalt Paving Association. Not to mention: the American Concrete Pavement Association, the American Concrete Institute.

Time to stop!

transportation funding must be weight-based

Dan AllisonLeave a comment

The California legislature is meeting in special session to discuss sources of funding for transportation (they are on summer break, but will get back to it). The state uses the number $5.7B as the annual shortfall in funds available for maintenance, and these discussion are largely an effort to close that gap. Some of the solutions are: 1) indexing the gas tax so that it doesn’t fall behind (it was last raised in 1990); 2) increasing transportation related fees such as vehicle registration; 3) increasing the tax on specific fuels such as diesel; and 4) basing taxes on VMT (vehicle miles traveled) rather than fuel purchase. Of course there have been other ideas such as redirecting high-speed rail funds (which would be illegal unless legislation and the voter-passed bond are completely undone), and using cap-and-trade funds for highways (also illegal because maintenance and certainly construction would not reduce greenhouse gases), but those right-wing ideas won’t receive consideration by me.

TransportationFundingCA-2014_overview

I think it extremely important that all taxes and fees be at least partially based on the weight of the vehicle. The amount of damage caused to roadways and bridges is almost exactly proportional to the weight of the vehicle, and those that weigh more should pay more, at least for the maintenance portion of the transportation budget. If, for example, VMT were used instead of or in addition to fuel tax, one mile by a lightweight passenger vehicle is in no way proportional to one mile by a heavy truck. The tax should instead be a multiplier of VMT and weight, with a strong component of weight. And yes, all vehicles should be charged, including government-owned vehicles, which cause just as much damage to roadways as commercial vehicles. There has been a ballooning of vehicle sizes and weights with the government to match the commercial sector, and this is one way of bringing that under some control. Yes, I realize this means public buses would be paying weight fees, and I think this is appropriate since they do cause significant damage to the roadways. However, public transportation could be more than compensated as we save money on wasteful parts of our transportation system.

Vehicle registration fees are based on the type and price of a vehicle, which means that commercial vehicles are already paying relatively more than less expensive private vehicles, but they are not paying their fair share in relationship to damage caused to roads. It is not just an issue of commercial vehicles, however. Heavy passenger vehicles (you know what I’m talking about) also pay much less than their share of maintenance because the price differential is not as great as the weight differential.

Commercial vehicles do pay a weight fee, which is the sort of thing I’m requesting, but it is not assessed at a high enough level to pay for the damage caused, and at least for now these fees are being diverted to the general treasury rather than being used for maintenance.

Note that I am intentionally ignoring the finer points of sales tax, excise tax, and the arcane fuel tax swap. They are important, but not important to this issue of all users paying their way. It is important to remember that only a portion of transportation funds in the state flows through the federal and state government. Local governments are actually the larger and more significant players. As well, the idea that gas tax pays for roadways is myth, it pays less than half, and has never paid all.

A lot of information about funding, including the chart above, is in the Transportation Funding in California – 2014 document from Caltrans. If this document doesn’t make your head spin, I don’t know what will.