Sunday, January 23, 2011

Case Closed: Highways Don't Pay Their Way

Is $600,000,000,000,000 in subsidies enough? PIRGIM
You've heard the story before. Transit riders and bicyclists are freeloaders living it up off public "subsidies," while roads and highways are covered by so-called "user fees" (gas taxes) that don't require that sort of spending. It's a story the highwaymen have repeated so often as to, well, drive it into our collective psyche.

As a new report shows, however, it's a lie.

The report, funded by the Public Interest Research Group in Michigan (PIRGIM), notes that gas taxes haven't usually been treated as "user fees" at all. They've rarely been dedicated just to highways, and the U.S. gas tax actually got started in an effort to reduce the federal deficit.

And do gas taxes cover the cost of roads? Not even close. Right now, they pay just half the cost of building and maintaining highways. As for the cost of wiping out Detroit's Lower East Side (I-96), and the cost of the asthma choking kids who live alongside freeways...well, you've got to be kidding.
Moreover, gas taxes are covering even less of the costs. According to PIRGIM's calculations, the gap between cumulative highway spending and cumulative"user" revenues surpassed $600 billion a few years ago, and it's growing faster than ever. We ain't seen nothin' yet, either, since we're witnessing a startling end to growth in the amount of driving we do.
The remarkable decline in driving, beginning circa 2008.

PIRGIM asks policymakers to recognize that transportation policies geared towards "mobility" are inherently absurd. Instead, we need to replace the mobility paradigm with one of accessibility: getting people where they need to go, instead of making them go farther and farther to fulfill the same needs. Most importantly, they urge that transportation policy be recognized as social policy, an area of government which has fundamental consequences for the way we live our lives.

Every advocate for sensible transportation, in Michigan and elsewhere, should read this critically important (and brief) report. Major props to PIRGIM for bringing the crucial truth to light. Now it's our task to develop a truthful narrative of how Michigan can forge a better path for the future. Removing our 10 percent limit on public transit funding from the gas tax would be a good place to start.


  1. Not only are we driving less but cars and trucks are getting much better fuel economy further reducing GALLONS of gas consumed. We need to restructure the tax code. SMART bus is in the same situation depending on tax revenuse based on falling home Values...

  2. Joel,

    The coverage of this topic in a planning book ("Contemproary Urban Planning" by John M. Levy)was so limited, that the author did not even provide any citations on this topic.

    I quote: "Roads and highways are, by and large, paid for by a vareity of taxes and charges levied on automobile users." There is a little more coverage, whch briefly touches on hidden costs, but he glosses over this.

    Is it it a poor sign that there are no citations but also rather limited coverage? I'm just trying to figure out how to contact the author, or contact the publisher to perhaps get an idea of how he makes this determination.

  3. Dave - sorry I missed your comment! I do think there's been very little analysis of the issue. You might also check out Todd Litman's work at the Victoria Transportation Policy Institute.

  4. firstly, We have to restructure the tax code. i agree with this statement

  5. So strange how that ends up happening. Should it be expected at this point? Sure, but still.