Feds Face Falling Gas Tax Revenue With Road Pricing, New Toll Roads
Oil prices go up. Gas prices go up. American consumers switch en masse to the kind of vehicles promoted by CAFE ( Corporate Average Fuel Economy) regs since 1975. They also help reduce American oil imports (and pollution) by driving 3.7 percent less over the first five months of '08. The reduced demand lowers the price of gas (OK, in theory). Everyone happy? Of course not. The same feds who want us to reduce our dependence on foreign oil are hit with a drop in federal gas tax revenue (currently 18 cents a gallon). And so the "acting head" of the Federal Highways Agency declares [via The Detroit News] that "without a doubt, our federal approach to transportation is broken." No, REALLY. "No amount of tweaking, adjusting or adding new layers on top will make things better." And he drops the other shoe. "Ray [that's MR. May sonny] said the Bush administration was in favor of a 'more progressive direct user fee' similar to a system that is currently being tested in Oregon. Under that pilot program, cars were equipped with on-board mileage counting equipment that was read by pumps equipped with mileage reader devices." Can you drop a third shoe? Sure! May also wants to "encourage" private companies to lease federal highways and maintain them through tolls. With ideas like that, what's the bet that the acting head is shuffled off-stage, and soon?
More by Robert Farago
Comments
Join the conversation
thoots, "What are we going to do when those who work in low-paid service-type jobs can’t afford to drive cars to their workplaces, and there are no alternatives like mass transit?" Let localities decide and pay for mass transit. Why do the feds need to get involved? Why does the money need to go all the way to DC, get skimmed once, and then come back to us with all sorts of strings attached that make the projects more expensive as well? Why do you assume without the feds, there is no solution? I believe if you look at the many transportation projects funded from congress, you will find plenty of questionable programs that groups from BOTH sides of the aisle will admit are pork. Lastly, no one here will complain about taxes to maintain roads, but most want little or nothing to do with taxes that are levied on drivers that go to other things. Your point here was completely off base.
Tax at 18 cents a gallon - incredible. In the UK petrol is currently in the region og $10.50 a gallon and some 87% of that price is tax going to the government. 18 cents seems pretty good to me!
Privatizing (and enacting tolls where none existed before) will have its own problems. Since non-government entities need to make a profit, it will need to be a well-run, efficient operation, free of corruption to serve the customers well. This will require government oversight (at taxpayer expense), to ensure that the roads are maintained in a safe manner, with competent contractors and durable materials. Anything less will likely result in cost-cutting, poor maintenance, and eventually having the Gov't to come in and take over the operation (bailout) to ensure the public safety. It's not like you have a choice, either (which is the foundation of the "free market" system). If you think that the private-owned I-80 through Pennsylvania is a crappy road because the tolls are high, and Company X does a poor job on safety, what do you do? Take another Interstate that will add 200 miles to your trip? And worse, adding tolls to roads (as in the expressways I-294 around Chicago) wastes MILLIONS of gallons of gas, as non EZPass customers have to slow, pull over, stop to pay a measly 80-cent toll, then accelerate like mad to get back into the 70MPH traffic they just left. And you get to do this several times to get around Chicago! Don't even get me started on the Indiana Turnpike, a narrow-laned, grass median, no guard rail nightmare to drive; I sat on this road for 2.5 hours last year as they had to pull a woman from her crushed Chevy Cavalier, who died when her car drifted into the center grass median, which grabbed her front tire, causing her to lose control, which launched her into an oncoming tractor-trailer on the other side of the highway. I once spent a terrifying night drive though fog on that road (headed to Wisconsin), where my stress was only compounded by the lack of guard rails and reflectors, and the worn-out lines on the road were barely visible at times. And on windy days, it's common to see several tractor-trailers blown off the road, lying in the center or right-side ditches.
I have a lot of issues with privatization. There really is not a lot of advantage to privatizing many government functions because those functions cannot be allowed to become true markets. Market gimmicks are not markets (as we learned in the California energy crisis). I think much of the move to privatize has been motivated by a dislike of government which has led some on the right to think that its some sort of panacea. It's not. Sometimes, we are just better off keeping things as government functions because they simply aren't ever going to be true markets. Toll roads are a good example. I believe that toll roads are now being built with their eventual privatization in mind. This even worsens the main problem with toll roads. There is an incentive to force traffic to the toll road rather than build "competitive" routes for free. Most toll roads in my area were originally built with promises to only charge the toll as long as it took to pay off the road. Now they are claiming they need the tolls to build more toll roads. So once again, why are we sending our money to washington?