Drivers pay less than what the roads cost

One report suggests the gap between what drivers pay and what roads cost continues to grow:

A report published earlier this year confirms, in tremendous detail, a very basic fact of transportation that’s widely disbelieved: Drivers don’t come close to paying for the costs of the roads they use. Published jointly by the Frontier Group and the U.S. PIRG Education Fund, “Who Pays for Roads?” exposes the myth that drivers are covering what they’re using.

The report documents that the amount that road users pay through gas taxes now accounts for less than half of what’s spent to maintain and expand the road system. The resulting shortfall is made up from other sources of tax revenue at the state and local levels, generated by drivers and non-drivers alike. This subsidizing of car ownership costs the typical household about $1,100 per year—over and above the costs of gas taxes, tolls, and other user fees…

There are good reasons to believe that the methodology of “Who Pays for Roads?” if anything considerably understates the subsidies to private vehicle operation. It doesn’t examine the hidden subsidies associated with the free public provision of on-street parking, or the costs imposed by nearly universal off-street parking requirements, which drive up the price of commercial and residential development. It also ignores the indirect costs that come to auto and non-auto users alike from the increased travel times and travel distances that result from subsidized auto-oriented sprawl. And it also doesn’t look at how the subsidies for new capacity in some places undermine the viability of older communities…

The problem with the subsidies currently propping up driving is that they’re often hidden: If they were made more explicit, policymakers would likely rearrange their priorities. The problem of pricing roads correctly is one that will grow in importance in the years ahead. It’s now widely understood that improvements in vehicle fuel efficiency and the advent of electric vehicles is eroding the already inadequate contribution of the gas tax to covering road costs. The business model of companies such as Uber and Lyft likewise hinges on paying much less for the use of the road system than it costs to operate. The problem is likely to be even larger if autonomous self-driving vehicles ever become widespread—in larger cities it may be much more economical for them to simply cruise “free” public streets than to stop and have to pay for parking. The root of many existing transportation problems—and the problems to come—is that the prices are all wrong.

Americans like their cars and policies have reflected that for decades. But, owning the “average” car is not cheap – there are a number of expenses that many drivers would say consume a decent amount of their budget. The real issue may not be increasing the gas tax – and with gas as cheap as it is right now, this would be as good a time as any to fix that – or limiting subsidies. The real goal may need to involve having less need for cars and roads. Having electric cars might help society in some ways but it doesn’t solve the problem of paying for roads (see the pilot programs for a per-mile driven tax). Electric cars may enable sprawl to go on for decades.

In the end, perhaps we need to figure out to build and maintain roads more cheaply…or we are left with two options I imagine a lot of people (not necessarily the same ones) will dislike: getting cars off the road or upping the cost of driving by quite a bit.

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