The Antiplanner generally appreciates the efforts of the Times, a fiscally conservative paper that tries to watchdog government agencies that waste tax dollars. But an editorial last Friday about highway user fees missed the point.
The article was written in response to Congressional Budget Office (CBO) report on highway user fees. “The claim is that driver’s aren’t paying their fair share because the $35 billion collected in federal gasoline taxes doesn’t cover highway spending,” the Times charged. That, however, is a misrepresentation of the CBO report.
“Some policymakers and transportation analysts have expressed interest in developing new sources of funding,” the report noted, partly because, “over fiscal years 2008 to 2010, federal spending on highways exceeded the revenues available in the trust fund, and the government supplemented the fund with about $30 billion from the Treasury’s general revenues.” Note that the CBO didn’t say this was a reason to reexamine sources of funding; only that “some policymakers” thought so.
The Times correctly points out that lots of money has been siphoned from highway user fees into transit and other programs. It is also true that the reason spending in 2008 and 2009 exceeded revenues was Congressional mismanagement, not a true shortfall in highway funds. But that doesn’t mean that gas taxes are working perfectly or that we can rely on them for future highway funding.
“Bureaucrats and rent-seeking corporate allies have teamed up to advocate a solution to a problem that doesn’t exist,” the Times insists. “They want continuous tracking of everyone’s driving so that every mile can be taxed.”
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The Times editorial writers should have read the report in a little more detail. The CBO’s main point was that the costs of highways are more proportional to miles driven than to gallons of fuel burned, so a vehicle-mile fee is more fair. Also, as cars become more fuel-efficient, gas taxes are less effective at paying for roads. “As scheduled increases in federal standards for average vehicle fuel efficiency take effect, dedicated revenues may fall further below spending,” the CBO notes. (Actually, the failure of gas taxes to keep up with the cost of providing roads is one of the main reasons congestion is many times worse today than it was thirty years.)
“Some policymakers and transportation analysts have expressed interest in developing new sources of funding, for two main reasons. One is that, over fiscal years 2008 to 2010, federal spending on highways exceeded the revenues available in the trust fund, and the government supplemented the fund with about $30 billion from the Treasury’s general revenues. As scheduled increases in federal standards for average vehicle fuel efficiency take effect, dedicated revenues may fall further below spending. The other main reason is that the current taxes do not give highway users an incentive to consider all of the costs their use of roads imposes on others.”
“The CBO insists we need to pay more because, ‘Any given driver’s highway use also imposes costs on other users,'” charges the Times. Actually, the CBO doesn’t insist on anything; the report specifically notes that, “In keeping with CBO’s mandate to provide objective, impartial analysis, this study does not make any recommendations.”
The truth is that gas taxes don’t work any more and really haven’t worked very well for several decades. The only reason we use gas taxes to pay for roads is because collection costs were low compared with tolls. Now that we have the technologies to collect tolls or vehicle-mile fees at a reasonably low cost (and without necessarily invading people’s privacy), we should make the switch.
The purpose of vehicle-mile fees is not to impose higher taxes on people; it is to provide better signals for road users and road providers. Such fees will let road users know the true cost of using the roads while they let road providers know where transportation investments are most needed. While there is no guarantee that voracious transit agencies won’t try to leech off of vehicle-mile fees–as they have gas taxes at the federal level and tolls and vehicle registration fees in some states–that’s not an argument against such fees; it is only an argument for the people who pay the fees to be more vigilant in protecting their investments.
Though even you Mr.O’Toole have said in the past that, roads are there regardless of economic conditons. That’s a very huge subsidy to auto drivers in it self.
Tolling/congestion charging eases the financial burden of property tax payers, which is still good.
Antiplanner:
I’d love to see you further quantify this concept by suggesting a vehicle-ton-mile fee, and not just a vehicle-mile fee.
We all know heavy trucks and buses impose more costs on a road than cars and light trucks, but I would imagine there is also a difference between the light trucks and vans that weigh 2-4 tons, and lighter cars, many of which are barely a ton, and some less.
Also, how would the vehicle mile fee apply to boat, camper, uhaul, utility, horse, livestock, and other trailers? Would they be counted as a seperate vehicle?
Perhaps there would need to be some split in the mileage fee – where there is a certain amount charged on the basis of simply being a vehicle in the system, and a certain amount charged on the basis of weight.
Another advantage of the gas tax takes care of those necessary distinctions in a relatively simple way because the laws of physics dictate that for the most part, the more weight moving down the road, the more gas must be consumed.
The gas tax has stopped working mostly because of Grover Norquist and the “No New Taxes” pledge. Obviously the amount of money produced in construction value by a 1993 level of gas tax on an ad valorem basis won’t be the same as the amount produced in 2011, even with somewhat higher consumption. The same reality of inadequte revenue and a huge maintenance and construction backlog will need to be faced with a vehicle mile tax too.
I just don’t see the advantage of a GPS per-mile tax. The gas tax is a pretty good proxy for road use — not that it is very accurate, but it is cheap to implement and has some correctly placed incentives. Close and cheap are very good in a use tax. It is far more fair than the vehicle tag tax, the driver license tax, and the tire tax.
The GPS method is a nightmare. It adds billions in wasted costs for the equipment and record keeping. The GPS data will be used by courts in almost every criminal trial, divorce case, and even speeding tickets. Already the computers in cars are used as a “black box” in accident litigation.Big Brother didn’t even envision something as intrusive as a GPS tracking chip.
If you are looking for a way to tax hybrids and electric vehicles more, then:
1. quit subsidizing them,
2. kick them out of the HOV lanes,
3. just increase their vehicle licensing fee because they don’t pay enough gas tax.
I’m not sure what GPS would be needed for a mileage tax. Cars have odometers don’t they? They have to get inspected every year right? Seems like a mileage tax would be relatively easy to implement (marginally more difficult than a sales tax), even with the added depth that Andrew describes.
I feel like were are at the beginning of the transition away from petrol fueled autos. As electric cars become more prevalent, the gas tax will not cut it as a user fee, and setting up a seperate fee for non-petrol cars plus a gas tax seem to have more administrative costs that going with one tax across the board. A mileage tax is more accurate, precise and fair to all road users. I think an important question is what the mileage tax will fund. Just what the gas tax currently funds, or will portions of that tax go to local governments for road (not just highways) improvements as well?
But we know how the process works, and even if a mileage tax is implemented in the near future, we know that the gas tax aint going anywhere.
The Antiplanner wrote:
The truth is that gas taxes don’t work any more and really haven’t worked very well for several decades. The only reason we use gas taxes to pay for roads is because collection costs were low compared with tolls. Now that we have the technologies to collect tolls or vehicle-mile fees at a reasonably low cost (and without necessarily invading people’s privacy), we should make the switch.
Certainly toll collection with transponders (e.g. E-ZPass, FasTrak, SunPass, BroBizz and others) is much less expensive than cash toll collection. But these are used on toll roads and toll crossings that would otherwise have (or still have) cash toll collection.
Does anyone know of any report which has objectively looked at the cost of collecting highway user fees through motor fuel taxes and compared it with other methods (such as large-scale GPS-based distance tolling, like Germany’s Toll Collect system for commercial vehicles (e.g. heavy trucks) on that nation’s autobahn network?
bennett wrote:
They have to get inspected every year right?
Not in my state (Maryland).
C.P,
Then you pay every other year, or whatever the time frame might be.
The Times:
“Anyone who owns an automobile knows there’s no end to the registration fees, personal property taxes, state gasoline taxes, inspection fees, parking tickets and other governmental levies on vehicle ownership.”
That’s because people want the nice things that taxes provide, but they don’t want to pay income tax. Hence, numerous taxes levied on cars. Because cars are big and expensive things, taxes can be levied without much evasion. They can try taxing my paper cup in a similar way, but then I will just throw the cup in the bin – I mean, carefully recycle it.
“Only a handful of people depend on the bicycles, buses and trolleys that meet with liberal approval. Everyone benefits from having food and other goods delivered by truck.”
Again, it’s not about ‘liberal approval’. It’s a hard-nosed assessment of how much space each form of transport takes up to move one person. Cars take up too much space, and when the road space is all used up, nobody’s going anywhere in a hurry. It would be nice to think that The Times could be bothered to make some practical suggestions for getting people using ‘bicycles, buses and trolleys’. Since bicycles are cheaper in financial terms than cars, the excessive generalised cost of the bicycle lies elsewhere. This needs to be addressed.
I love the way that The Times has conflated lorries and cars. Lorries are necessary for moving large amounts of stuff around the country (although, if the USA is anything like the UK, many lorries are running largely empty). Cars are a popular form of transport but there are other forms. One approach used in the UK is to break out the load of a lorry on the outskirts of town so that the lorry doesn’t have to be driven into town, and a van can be used instead.
“…and the automobile has done more to enable this country’s economic success than any other invention.”
So not education? Better health care? Capitalist economics? Greater efficiency in production (including the production line)? Etc.
FrancisKing,
I just want to note that is a pleasure to read your comments from across The Pond. Please keep commenting and adding a non-US perspective.
And please keep using the term “lorries”!
borealis & bennett,
The advantages of a GPS approach are:
1. The money can go to the entities that own the roads that are being used. If I drive solely on county roads, my fee will go to the county, not the state or city.
2. Toll roads and congested highways can tie into the GPSs using variable charges. We won’t have to buy separate transponders for every toll road we use, we can just use the GPS.
I am sure there are other advantages as well.
The privacy concerns are not insignificant. Who’s to say that we won’t be tracked every step of our trips, and the information filed away for later use? The capability is obviously there.
Antiplanner,
Oh, I didn’t realize the GPS system would go into that level of detail. That is an economist’s dream and a civil libertarian’s nightmare.
Thinking it through, the politics would likely demand a sort of in-between private entity that gets all the individual GPS data, computes tax bills and road use allocations, but hides the individual data in a way that cannot be undone. Advocates of the GPS system should look into how that could be accomplished.
We already tracked. The London cellphone movement study.
Dan
Borealis:
The civil libertarians nightmare is already happening at places like Ft. Meade, and is only going to get worse with new projects like the National Cyber-security Initiative (CNCI) Data Center I saw under construction outside Salt Lake City.
The best thing for privacy about collecting a veritable Nnoachian flood of data is that it is impossible for a few thousand human analysts to have time for anything more than a flickering instant of the activities of any one person.
If the Antiplanner’s stated goal of allocating vehicle mile taxes to all relevant government entities is possible, I look forward to seeing sales taxes being collected for all these “tax free” online transactions so that tax rates can be cut overall.
“I’m not sure what GPS would be needed for a mileage tax. Cars have odometers don’t they? They have to get inspected every year right? ” – Bennett
While agree that it’s not needed. Using odometers probably isn’t going to work. It’s not just the Feds that will want in on the back but state governments. Odometers don’t show how many miles were driven in NY vs NJ vs PA. More so the majority of Americans don’t have to ever have their vehicle inspected on a regular basis.
Personally, I’d rather see the gas tax increased. I know the popular thinking right now is that the per mile tax can be done where the gas tax increase is a political shot in the foot but I haven’t chatted with too many people that don’t dislike having to pay per mile, either.
I would only be in favor of any gas tax increases if as a condition of the increase, the money is allocated solely for highway/road use, and none is stolen for use by wasteful choo choo trains or other popular, communist era social-engineering tools.
Fine, that could offset some property taxes towards improving transit service.
Though what would be better than gas taxes which are not road user fees, would be a monthly bill of $1 per every mile driven.