Building Highways the Hard Way

476897084_0f66d1ef97Perusing post-holiday news, I came across two stories that highlight my frustration with status quo thinking. The first story focuses on a federal commission charged with exploring an increase in the gas tax or raising funds for road upkeep via mileage:

Motorists are driving less and buying less gasoline, which means fuel taxes aren’t raising enough money to keep pace with the cost of road, bridge and transit programs.

A federal commission created by Congress to find a way to make up the growing revenue shortfall in the program that funds highway repairs and construction is talking about increasing federal gas and diesel taxes…According to a draft of the financing commission’s recommendations, the nation needs to move to a new system that taxes motorists according to how much they use roads. While details have not been worked out, such a system would mean equipping every car and truck with a device that uses global positioning satellites and transponders to record how many miles the vehicle has been driven, and perhaps the type of roads and time of day. (link)

The second story deals with a proposed solution to raise road funds in Oregon also based on mileage:

Oregon is among a growing number of states exploring ways to tax drivers based on the number of miles they drive instead of how much gas they use, even going so far as to install GPS monitoring devices in 300 vehicles. The idea first emerged nearly 10 years ago as Oregon lawmakers worried that fuel-efficient cars such as gas-electric hybrids could pose a threat to road upkeep, which is paid for largely with gasoline taxes. (link)

Oh, the Irony.

In case you missed it, the people in charge are essentially trying to figure out how to fix shortfalls in their funding because their citizens actually paid attention to the pleas (or got tired of shelling out money) to drive less and conserve fuel. Even more entertaining is the concern stated explicitly by Oregon lawmakers that more fuel efficient cars pose a threat to road upkeep because they don’t require as many trips to the pump, lessening their owners’ contributions via the gas tax.

From an economic standpoint, I’m unsure why the option of people paying for the roads they use, without installing a government-owned monitoring device, isn’t a viable option that balances the burden while meeting the funding needs. Whether through the use of toll roads or paying a yearly fee to have a pass for traveling on Interstates, there are other ways to make roads pays for themselves.

From a logical standpoint, either the argument for raising the fuel tax or for taxing mileage fails to make sense based on the current mantra to drive less and to lower fuel consumption. In addition, the notion that people who choose to purchase more fuel-efficient vehicles are “getting away” with something is ludicrous. Again, these people listened to those who called for smarter vehicle purchases. Now the powers that be are surprised that their call to action has had a chain reaction. However, their arguments fail to address an underlying imbalance in either proposed system of raising the gas tax or taxing mileage.

When Other Option Don’t Exist

As the proponents of such measures argue, the overall number of people driving has dropped and thus fuel consumption, lowering the amount of funds available for roads and the like. In theory, the people who are still driving, particularly during price spikes, are doing so because they have to. This group includes long-distance truckers, people who work outside of mass transit systems, and farmers to name a few. Taking the example to the next step, the government wants these individuals and entities to pay more for being on the roads, making up the difference for those who did as asked and stayed home because they could or rode the bus.

Roads Paying for Themselves

Every person that drives a car must pay some related fee (e.g., vehicle registration, car insurance, etc.) to operate a vehicle legally, regardless of how much they drive. Even if I become the little old lady who only drives to the store and back, I still have to pay those related costs to operate a vehicle. I believe you can implement a similar program for roads.

People could be charged for access to specific roads, regardless of how much they’re on them in the same way that we must pay the set amount for vehicle fees regardless of how often we drive our cars. Such a system also has the attractive feature of not requiring a government-installed device to track usage, helping protect driver privacy. Also, just like you can get a ticket for expired registration or lack of insurance, you could be ticketed for not paying to be on that road.

Before you start shouting that this solution is no more fair than the other proposed systems, consider this: such an option offers the flexibility to set up a tiered system that breaks roads into different categories. Such a system could be designed to take into account the needs of people who only travel locally versus those who travel nationally or high-traffic roads in urban areas versus a small town grid. By default, those who don’t own a vehicle won’t have to pay for using the roads. Instead, if needed, their contributions could came through an additional charge on a bus or metro pass.

You Need to Eventually Get the Carrot

Regardless of the end solution, one thing is clear: you can’t ask something of people and then essentially punish them for doing what you asked. At some point, they’ll stop supporting your efforts. Why do governments believe they are exempt from this reality?

How do you think we could do it better?

Image courtesy of Thomas Hawk


3 Responses to “Building Highways the Hard Way”

  1. January 2, 2009 at 8:48 pm

    Thank you so much for this great smack in the head observation! Oh, the triumph of means (money) over ends (what we really want to accomplish – i.e. strong infrastructure, etc.)!

    About a year ago, I found a similar smack-in-the-head and wrote about it in a post I called “I Only Hurt You Because I Love You.” The head-smack for me was reading that wildlife agencies were lamenting the shrinking ranks of hunters, as the decrease was causing a decrease in revenues for conservation. Yes, unless more people killed those animals, the government couldn’t afford to work at keeping them alive! http://is.gd/esrH

    Thanks for giving me something else to shake my head over this weekend!

    • 2 Britt
      January 2, 2009 at 9:09 pm

      @Hildy: Sadly, I believe we’ll never run out of examples of entities encouraging certain behavior then scratching their heads over the fallout, despite the best of intentions. We seem disinclined to examine the consequences, both good and bad, of promoting specific actions. I’ve been following the the guys behind Nudge, Richard Thaler & Cass Sunstein. I’m hopeful that more people will pay attention to their work and how little things can make big differences in creating change or promoting behavior. It seems like we get caught up with the idea that action has to be big or dramatic to affect behavior. We’ve been quick to adopt roads for picking up trash. Maybe it’s time we adopted roads for upkeep and maintenance.

  2. January 4, 2009 at 2:31 am

    First off, great post – you’ve produced yet another excellent “smack in the head”, as Hildy puts it. By the way, I think hunters and fishermen have done more for the wildlife conservation movement through their own efforts privately than any government organization has done through the use of their licensing fees and other assorted taxes.

    Second, I love your idea of usage fees – or, maybe ‘love’ is too strong a word. I think it is the best idea I’ve heard (I don’t really love any tax, to speak of).

    In my state (Iowa) we have a very rural part of the state (western) and an increasingly urban part of the state (central to eastern). Guess where most of our road use tax (a.k.a. gas tax) goes? If you said central and eastern Iowa, you win the gold star. For those of us western Iowa folk who never venture to our state’s capital or to any points east of there, that is a ridiculous tax and an outright insult to people who live in the most rural parts of the state.

    To give my favorite hideous local example of this discriminatory tax, we have numerous bridges on state highways here in the western part of the state with signs stating that the bridge is only safe for one truck at a time. Last time I visited central Iowa, I didn’t see a single bridge that couldn’t support two semi trucks at once, and in addition I saw numerous freeway improvement projects around our capital city.

    I’m sure this is not unique to Iowa – that it is probably played out time and time again in places all over our great country. Your idea for compartmentalizing road use tax is, so far, the most logical thinking I’ve heard on the subject. I would add a regional aspect to the divisions, also, to better account for costs of things like regional interstate highways (beltways & freeways) around and through cities.

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