New Report: Road Funding From Non-Road Users Doubled in 25 Years

highway_funds_chart.png(Image: Subsidyscope)

The myth
that U.S. roads "pay for themselves" thanks to user fees is a subject
that’s likely familiar to many Streetsblog Capitol Hill readers — but
just how much of the nation’s highway funding is provided by charging
drivers?

The answer may surprise even active critics of the
current asphalt-centric transportation system. Between 1982 and 2007,
the amount of federal highway revenue derived from non-users of the
highway system has doubled, according to a study released today by Subsidyscope.

Analyzing
Federal Highway Administration data dating back to 1957, the dawn of
the Interstate system, Subsidyscope researchers found that non-users of
the highway system contributed $70 billion for nationwide road
construction and maintenance in 2007. In 1982, by contrast, highway
contributions from non-users totaled just $35 billion (in 2007 dollars).

Today’s
study also found that the share of road funding generated by user fees
fell to 51 percent in 2007, down from 61 percent just a decade earlier.
(The accounting used by Subsidyscope, a joint project of the Pew
Charitable Trusts and the Sunlight Foundation, accounted for the use of
about one-sixth of federal gas tax revenue to pay for transit.)

What
has caused the government’s increasingly rapid dependence on non-road
user fees — which more often than not take the form of direct
transfers from the Treasury — to pay for roads?

Subsidyscope
points out that the federal gas tax has stayed stagnant since 1993,
rapidly losing value as inflation climbs, but the growing popularity of
bond issuances as a way to pay for new roads is also a factor.
According to Subsidyscope’s research, the value of new bonds issued to
pay for highways reached $24.7 billion in 2007, up from just $6 billion
in new bonds issued in 1982 (converted to 2007 dollars).

Bond
offerings, which often represent states and localities playing a
greater role in transportation planning, do not guarantee that users
will be paying for new highway construction — rather, bonds depend on
market conditions to allow a successful leveraging of debt, and the
recent economic downturn has forced many governments to limit their bonding plans.

  • One big problem is that fuel taxes are a flat cents per gallon, instead of a percentage. So when fuel prices go up and consumption goes down, tax revenues go down too.

  • And don’t forget the stimulus with $30 billion for roads and highways. The U.S. is going the wrong direction, and at increasing speed.

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