By Eric Sundquist
Most readers of this blog are well aware that subsidies are common across transportation modes. But it’s useful to have the numbers, and so periodic reports by the Tax Foundations, which supports “simplicity, neutrality, transparency, and stability” in the tax code, are helpful.
The most recent report, published this month, shows the portion of roads paid for by travelers and shippers—fuel tax, tolls, and other user fees—by state. The figures range from 12 percent in Alaska to 76 percent in Hawaii, based on fiscal 2014 figures. The report does not give a national figure, but a previous version estimated user fees cover just 50 percent of road costs.
The Tax Foundation’s point is to advocate for greater coverage of costs by user fee. According to Executive Vice President Joseph Henchman:
“The lion’s share of transportation funding should come from user fees (amounts a user pays directly for a service the user receives, such as tolls) and user taxes (amounts a user pays, based on usage, for transportation, such as fuel and motor vehicle license taxes). When road funding comes from a mix of tolls and gasoline taxes, the people that use the roads bear a sizeable portion of the cost. By contrast, funding transportation out of general revenue makes roads ‘free,’ and consequently, overused or congested—often the precise problem transportation spending programs are meant to solve.”
Regardless of what you think of that argument, the figures are also relevant to DOTs that are pursuing multimodalism and get pushback from stakeholders complaining about subsidies to non-auto travelers and facilities. Motorists, transit riders, cyclists, and pedestrians are all using heavily subsidized facilities.
Eric Sundquist is Director of SSTI.
By Eric Sundquist