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July 12, 2010

Paying for Transportation: Let's Not Be Fuelish

My father taught me that “there’s no such thing as a free lunch”. I’m trying to teach my daughter that there’s no such thing as a free ride.

With a newly minted driver’s license, she’s found new freedom behind the wheel… until I ask her to fill the gas tank. Now, as we drive past local gas stations, she’s taken new interest in comparison pricing.

A large part of the cost of gas is taxes that subsidize our transportation system. That’s why gas is so much cheaper in New Jersey (no taxes)… but also why they have expensive tolls on their highways. Remember… “no free ride”.

But as I have written about for five years now, gasoline prices in this country are still too low because they don’t ask us to pay for the true costs associated with driving.

How much would gasoline cost if the pump price included the billions we spend each day fighting to keep access to Middle East oil? Or, what if drivers were asked to repay the 40% of all police costs associated with patrolling the roads? Or how about asking motorists to pay at the pump for the land lost to taxation by turning it into highways?

But it gets worse.

In Connecticut we are facing a major funding crisis in transportation because of our over-reliance on the gas tax.

Not even the relatively expensive fares on Metro-North reflect the true cost of running that service, hence the operating subsidy by the state from the Special Transportation Fund (STF). Created in 1984, the STF was to be a “lock box” of money to invest in our state’s transportation infrastructure and help cover the cost of transit operations.

But 40% of the STF comes from gasoline taxes. So in 1997 when Governor John Rowland got the legislature to cut the gas tax from 39 cents to 25 cents a gallon, he doomed the fare-paying bus and rail passengers in our state.

Every penny of gas tax raises $15 million in annual revenue. So Rowland’s tax-cutting stunt cost the STF $210 million a year, or almost $3 billion to date. That’s money that wasn’t available to be used to repair our roads, buy new rail cars or buses or keep fares affordable.

And going forward, with automobiles becoming more fuel efficient (i.e. using less gas) and eventually becoming all-electric (using no gas), the STF will have even less funding to maintain the highways and keep mass transit affordable.

And that’s not even considering the legislature’s recent diversion of $10 million from the STF into the general fund to balance the budget. So much for “lock boxes.”

What’s the alternative?

Well, tolls would be a good start. But the state’s Transportation Strategy Board spent a million dollars to study tolling, only to reject eleven options cited by the consultants. And there are precious few lawmakers in Hartford or Washington willing to suggest tolling our “free-ways”, especially in an election year.

Or how about using a VMT (Vehicle Miles Traveled) tax? Motorists would pay for the number of miles they drive: a highway use fee. Of course, the use of GPS to track their travel patterns and charge by time-of-day and congestion probably leaves the libertarians shaking… as if Big Brother doesn’t know your every move already by tracking your cell phone.

Or how about what they’ve done in Portland Oregon, a payroll tax of .07% with proceeds going directly to the transit system, by-passing sticky-fingered legislators.

Someone, somehow is going to pay for our roads and rails. If not in a gas tax, then in some other revenue raising-mechanism. Because, as we must all understand, there is no free ride.

2 comments:

Jim Cameron said...

When I'm wrong, I'll admit it.

I said there are no fuel taxes in New Jersey. Friend Mike Riley at the Motor Transport Assoc, a trucking lobbyist in Hartford, says that's not the case.

CT charges $0.416 per gallon. New Jersey charges $0.145

JIM CAMERON

Chris said...

I really can't understand how US fuel prices are so low. In the Uk we pay approximately £1.20 per litre, so god knows what that is in USD for a gallon! It also seems crazy to me that a country with some of the biggest vehicles on the roads today charge so little for fuel.
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