[PRCo] Re: All travel modes are subsidized

Sat Sep 5 11:20:49 EDT 2009

Average gas tax is 47 cents per gallon in US.  Pennsylvania is over 50 cents.  The state rate is around 32-33 cents.

The 18 cent figure is only the federal amount, which goes primarily for construction.  The state tax is the maintenance side of the equation.  But there is a lot of overlap and special interests.

Recently, the argument about tolls and mileage based highway taxing schemes is to continue offering a tax break to SUVs and truckers.  The goal is to shift the cost of highways to the more fuel efficient vehicle owners.  Instead we will come up with a scheme so that Fred's VW and my Honda 'subsidize' the neighbors hummer and SUV.  It's the American way.

Cheers

John

> From: fwschneider at comcast.net
> Subject: [PRCo] Re: All travel modes are subsidized
> Date: Fri, 4 Sep 2009 15:01:04 -0400
> To: pittsburgh-railways at dementia.org
> 
> Bill:
> I wanted to share with some other what you wrote but not your 
> address ... I've returned my comments to you by blind carbon.
> 
> Part of the problem here is that politicians have long been reluctant 
> to index a gas tax to any means of calculating inflation. For 
> example, the 3 cents in 1958 should be around 30 cents today instead 
> of 18 cents. Of course there are those who will say that the 
> consumer price index doesn't double in that time and it doesn't 
> because we shift our buying habits. But if we are maintaining 
> roads, we have no choice but to continue to use asphalt or 
> concrete ... we cannot shift to dirt because it is cheaper. We 
> cannot make bridges out of string instead of steel because string is 
> cheaper. Therefore we need to have the highway taxes based on a 
> relevant commodities index.
> 
> Texas has one of the lower fossil fuel tax rates in the nation ... 
> probably along the same lines as North Carolina used to support its 
> tobacco industry.
> 
> http://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States
> 
> Of course we worry about it after a bridge collapses.
> 
> fws
> 
> 
> 
> 
> On Sep 4, 2009, at 2:16 PM, Vigrass, Bill wrote:
> 
> > All, See below, TXDOT. In my research for my MBA 1962 I found that 
> > on the average, fuel tax and other taxes on vehicles, esp trucks 
> > generated about 60% of costs for highways and roads. This is 
> > exactly the same as TXDOT reports. It is historic.
> > Truckers like it. Businesses that use trucks, which is most of 
> > them, like it since they pay less for carriage.
> > The rest of us make up the 40%. Nuthin’ new.
> > Anytime a good is offered for less than its cost, more of it is 
> > used, boosting the problem. “It’s good for business”.
> >
> > BillVigrass, transportation economist and planner.
> >
> > From: Ken Prendergast
> > Sent: Thursday, September 03, 2009 10:49 PM
> > To: Ken Prendergast
> > Subject: All travel modes are subsidized
> >
> > As the 3C "Quick Start" and other Ohio passenger rail projects come 
> > to the fore, please keep this information in mind (especially the 
> > bold text from the Texas Department of Transportation). It's why 
> > state and federal gas taxes aren't able to fulfill highway budgets 
> > that must be augmented with general revenue funds. Texas DOT knew 
> > this a year ago, as did many others....
> >
> > http://www.cnu.org/node/2329
> >
> > Texas DOT fesses up about endless subsidies for highways — will 
> > Wisconsin be next?
> >
> > Submitted by Filmanowicz on Mon, 08/04/2008 - 3:38pm.
> > budget shortfalls
> > gas tax
> > highway funding
> > Texas DOT
> > toll roads
> > transit funding
> > Transportation
> > Wisconsin DOT
> > If you've ever been in an argument with a highway booster who 
> > claims that highways "pay for themselves" through gas tax receipts 
> > while transit requires dreaded "ongoing subsidies," you'll 
> > appreciate the candor of the Texas DOT in this posting to its Keep 
> > Texas Moving website. TxDOT answers the question "Do Roads Pay for 
> > Themselves?" with a simple "no," using a very straightforward 
> > calculus to demonstrate that the gas tax receipts generated by any 
> > given stretch of highway fall far short of the combined 
> > construction and maintenance costs of that highway. In other words, 
> > highways require those dreaded ongoing subsidies, mile after mile, 
> > year after year.
> >
> > The backstory here may be that the Lone Star state — in its quest 
> > to keep its Texas crews moving, building and expanding highways — 
> > has been more forward than most states in acknowledging the limits 
> > of the gas tax and shifting towards toll roads. As a result, the 
> > DOT and state government are coming under pressure to explain the 
> > new tolls to populist critics. Since citizens were led to believe 
> > that highways, uh, paid for themselves, a lot of them now want to 
> > know why they have to pay for them again through tolls. It's a good 
> > question that may now be leading to what formerly would have been 
> > startling admissions like the following: a typical highway project 
> > like State Highway 99 in Houston will generate only 16% of the $1 
> > billion needed for construction and maintenance through gas tax 
> > receipts. Maybe CNU board member and Texas House Transportation 
> > Committee chair Mike Krusee -- who has supported transit projects, 
> > better surface street designs and the DOT shift to tolled highways 
> > -- had something to do with TxDOT coming clean and starting to put 
> > transit and highways on something closer to equal rhetorical footing.
> >
> > <image001.jpg>
> > Now it's time this type of "truth in transportation" comes to more 
> > states -- like Wisconsin. As top Badger blogger Jim Rowen notes, 
> > the Wisconsin DOT still has its head buried in asphalt. With gas 
> > tax receipts failing to deliver the dough to pay for colossal (and 
> > difficult to justify) highway expansions across Southeast 
> > Wisconsin, they're quietly passing much of the bill for these 
> > projects on to future taxpayers through expanded borrowing — a 
> > fiscal bubble that may well burst as skyrocketing prices of 
> > petroleum-based asphalt make highways more and more expensive to 
> > pave and repave.
> >
> > Excerpt from TXDOT:
> >
> > Until recently, when TxDOT built or expanded a road, no methodology 
> > existed to determine the extent to which this work would be paid 
> > off through revenues.
> >
> > The Asset Value Index, was developed to compare the full 40-year 
> > life-cycle costs to the revenues attributable to a given road 
> > corridor or section.
> >
> > The shorthand version calculates how much gasoline is consumed on a 
> > roadway and how much gas tax revenue that generates. The Asset 
> > Value Index is the ratio of the total expected revenues divided by 
> > the total expected costs.
> >
> > If the ratio is 0.60, the road will produce revenues to meet 60 
> > percent of its costs; it would be “paid for” only if the ratio were 
> > 1.00, when the revenues met 100 percent of costs.
> >
> > Another way of describing this is to do a “tax gap” analysis, which 
> > shows how much the state fuel tax would have to be on that given 
> > corridor for the ratio for revenues to match costs.
> >
> > Applying this methodology, revealed that no road pays for itself in 
> > gas taxes and fees.
> >
> > For example, in Houston, the 15 miles of SH 99 from I-10 to US 290 
> > will cost $1 billion to build and maintain over its lifetime, while 
> > only generating $162 million in gas taxes.
> >
> > That gives a tax gap ratio of .16, which means that the real gas 
> > tax rate people would need to pay on this segment of road to 
> > completely pay for it would be $2.22 per gallon.
> >
> > This is just one example, but there is not one road in Texas that 
> > pays for itself based on the tax system of today. Some roads pay 
> > for about half their true cost, but most roads we have analyzed pay 
> > for considerably less.
> >
> > Image of supersized intersection of Lyndon B. Johnson and Central 
> > expressways in Dallas, TX via Jeremy Stump at Flickr.
> >
> > _________________________________________
> >
> >
> >
> > Kenneth Prendergast
> > Executive Director
> > All Aboard Ohio!
> > 12029 Clifton Blvd., Suite 505
> > Cleveland, OH 44107-2189
> > (216) 288-4883 cell
> > kenprendergast at allaboardohio.org
> > www.allaboardohio.org
> >
> 
> 
> 

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