Myth Busted: Road Costs Not Covered by Gas Taxes

Myth Busted: Road Costs Not Covered by Gas Taxes: From the RedTape Blog: "A new report released today by the Public Interest Research Group in Michigan (PIRGIM) disproves the common misperception that road-building is paid for by user fees, showing that gas taxes cover barely half the costs of building and maintaining roads, a fraction which is likely to fall steadily.

Among the findings of the report:


· Federal gasoline taxes were originally intended for debt relief, not roads.


· Highways, roads and streets have received more than $600 billion in subsidies over the last 63 years in excess of the amount raised through gasoline taxes.


· The amount of money a particular driver pays in gasoline taxes bears little relationship to his or her use of roads funded by gas taxes. Drivers pay gasoline taxes for the miles they drive on local streets and roads, even though those proceeds are typically used to pay for state and federal highways.


“Michigan needs to make difficult choices about how to fund our state’s troubled transportation system. The first task is to discard common myths about how roads are paid for,” said Meghan Hess at PIRGIM.


This report comes at a time when Michiganders are waiting for the state senate to approve matching funds in order to receive $161 million from the American Recovery and Reinvestment Act to improve rail service between Detroit and Chicago. The senate failed to bring the issue up for a vote during the 2010 legislative session.


“Raising the gas tax in Michigan is one way for us to begin to address our budget issues, but our report shows that devoting this increased revenue solely to highway projects would be a senseless missed opportunity,” said Hess. “The Michigan Senate still needs to approve $37 million in state funds in order to receive $161 million in federal money for rail improvements—this would be a 4-to-1 return on our money that would actually improve the local economy.”


This year, Congress will again address funding for the nation’s Highway Trust Fund, which has been bailed out four times with $35 billion from general funds since 2008. Federal gas taxes have not increased since 1993 and revenues are expected to remain flat as Americans continue to drive less and use more fuel-efficient cars.


“Highway advocates often wrongly portray highway spending as financially conservative by falsely labeling gas taxes as “user fees” that pay for roads,” said Hess. “Funding programs based on myths instead of on what is most needed is wasteful and unproductive.”


For more information, see Do Roads Pay for Themselves?, PIRGIM Executive Summary, or Do Roads Pay For Themselves : Setting the Records Straight on Transporation Fun ding, PIRGIM Full Report, January 2011.

Original post blogged on b2evolution.

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