Roads: America's $600 Billion Subsidy

January 11, 2011 25 comments Open printer friendly version of this article Print Article

So much for the myth that roads pay for themselves through the form of gas taxes and tolls. A recently released study from the U.S. Public Interest Research Group claims the answer is a resounding "no" as it's revealed that road construction has sucked $600 billion out of American taxpayer's wallets since the creation of the interstate system.




Since 1947, American highways have run up a deficit bigger than $600 billion, in 2005 dollars. Source: U.S. PIRG

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- First, let’s dispense with the idea that the gas tax – the primary source of financing for federal transportation projects – is a user fee. “If you go to a state park and pay the fee to get in there, that’s a user fee,” report author Dan Smith, U.S. PIRG’s transportation associate, told Streetsblog. “If you’re driving down the road and you have to pay the toll for driving on that specific road, that’s a user fee.” But people also pay gas taxes to fill up their lawnmowers. And those lawnmowers don’t usually end up on the highway. Just because you fill your tank doesn’t mean you ever drive on the roads funded by the gas tax you pay.

- Then there’s the huge contradiction underpinning the core arguments for highway expansion. Do new roads cut congestion, or do they “pay for themselves”? Highway lobbyists try to have it both ways, but the truth is that neither of these propositions hold water. Highway expansions are often justified as projects that relieve traffic and, believe it or not, reduce pollution. So if a highway widening achieved its stated aims, it would cut congestion and fuel consumption, which would mean fewer gas tax dollars and roads that don’t pay for even a fraction of their construction costs. However, we know that new highway capacity doesn’t actually reduce driving – it induces more driving. The additional traffic created by expanding highways does generate more gas tax revenue, but still not enough to come close to covering the costs of new roads.

- The argument that drivers pay for roads might be somewhat more credible if they weren’t taking money away from other public funding streams. Gasoline is exempt from sales taxes in 37 states and the District of Columbia. So rather than paying into the general revenues for the state, motorists are paying into an already narrowly prescribed pot of funding, which highway advocates want to see prescribed even more narrowly to exclude transit and bike/pedestrian projects.

- Tolls are, indeed, an honest-to-goodness user fee, charging drivers directly for the road they’re driving on. But the overwhelming majority of roads are not funded by tolls. Local streets don’t have tolls. Rural highways don’t often have them. And tolls don’t come close to covering the costs of roads. According to U.S. PIRG, “In the 1950s, experts estimated that no more than 9,000 miles of highway (compared with the more than 3 million miles of highway in existence at that time) could support themselves with tolls.”

- The report goes into ancient history (the Hoover administration), investigating the original intent of the gas tax at both the state and federal levels, and debunking the myth that they were always intended to pay only for highways. Indeed, federal gas taxes originated in the 1930s and were dedicated exclusively for highways only for a 17-year period, starting in 1956, covering the construction of the interstate highway system. Since 1973, the gas tax has been used for a variety of transportation programs and has even been used, on occasion, to pay down the deficit.

And now the obvious: You can’t measure all the costs of driving with the price of asphalt. The U.S. PIRG report gives a laundry list of external costs associated with driving, including:

* Changes in the risk of accidents, including injuries to non-drivers and damages to property.

* Environmental and public health impacts, including smog, greenhouse gases, water pollution from highway runoff, and the impacts on wildlife and outdoor enthusiasts.

* National security and economic implications of protecting access to foreign oil.

* Increased pressure on those without cars.

* Quality of life and the impact of roads on active transportation, such as walking and biking.

* Car-centric development patterns, sprawl, and the resulting infrastructure costs for the expansion of water, sewer, and other services.

Read More: http://dc.streetsblog.org/2011/01/04/actually-highway-builders-roads-don’t-pay-for-themselves/

Full Report PDF: http://cdn.publicinterestnetwork.org/assets/28b773b9f18cdb23da3e48a8d7884854/Do-Roads-Pay-for-Themselves_-wUS.pdf


Moral Of The Story

Think twice before assuming investing in alternative forms of mobility won't save taxpayers money.