Highway's toll

October 09, 2007

Highways are often regarded as the ultimate example of user-financed government. Motorists pay a variety of fees, from state and federal taxes on fuel to titling and registration fees on vehicles, to pay for their construction and maintenance. But are roads truly self-sustaining? A new study says absolutely not.

Researcher Mark A. Delucchi of the University of California, Davis' Institute of Transportation Studies recently looked at the nation's total expenditures on roads and compared the result with the total collected in highway-related taxes and fees. The gap was substantial - the tax on a gallon of gas would have to be increased 20 to 70 cents per gallon to make driving a car a truly fee-for-service arrangement.

That's not necessarily to advocate for an immediate doubling or tripling of the gas tax, but policymakers need to reject the long-held myth that driving a car is not a heavily taxpayer-subsidized activity. This is a key point in the ongoing debate over whether to spend money on public transit or roads. Transit may be subsidized more overtly, but roads require their share of tax dollars, too.

And when broad societal costs are part of the equation and transit's energy efficiency and advantages to the environment are weighed, rail and bus travel looks like an even better bargain. The UC Davis study notes that if these kinds of nonmonetary factors are considered, the gas tax would have to be raised more than $1 per gallon to finance roads.

In this context, Gov. Martin O'Malley's proposal to raise nearly $400 million annually to invest in Maryland transportation projects - particularly with its projected fraction-of-a-cent gas tax increase next year - may simply be too modest in scope.

Count the U.S. Chamber of Commerce as among those favoring a tax increase on the federal level. The conservative business group has called for more to be spent on intercity passenger rail, transit systems and ports, all of which could be paid for by higher gas taxes or perhaps a "carbon tax to address global warming." Looking at the numbers, it's difficult not to agree.

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