Tag: "gasoline tax"

Developing a National Market-Oriented Transportation Policy

The recent congressional elections and the Republican’s new majority in the Senate mark a good time to analyze U.S. transportation policy. The U.S. has not had a comprehensive transportation vision since the completion of the Interstate system in 1991. Although the three most recent six-year transportation acts, the Intermodal Surface Transportation Efficiency Act (ISTEA), the Transportation Efficiency Act for the 21st Century (TEA-21) and the Safe, Accountable, Flexible, Efficient, Transportation for Equity Act: A Legacy for Users (SAFETEA-LU) all spent increasing gas tax revenue on transit, non-motorized transit and active transportation, the most recent two-year bill Moving Ahead for Progress in the 21st Century (MAP-21) reversed that trend. With surface transportation policy set to expire in May, policymakers are threatening (promising) a new long-term bill. What aspects should a free market transportation policy on the national level contain?

First, only national systems should be funded. What is a national system? Generally, it is a transportation asset that is not naturally confined to one state. Interstate highways and other major roads that are part of the National Highway System and transport people and goods between various states are national assets. County highways and local streets that move people and goods between counties or cities are not. Class one railroads are national assets (most freight rail is private and does not need or want government funding and interference). Passenger rail that is commercially viable is also a candidate, but the only potential passenger rail line is the Northeast Corridor. Aviation, both passenger and freight, clearly fit the bill. While it has become sexy to fund transit and non-motorized transit from federal funds, both are locally oriented and should be funded at the state, regional, county or local level.

How would such a system be supported? The most economically efficient method is a user-pay/user-benefit system. For highways this means transitioning from a partial user-pay/user-benefit gas tax system (some of the money gets diverted to other uses) to a complete user-pay user-benefit mileage based user fee system. For aviation this means continuing the use of passenger facility charges (PFC) and allowing airports to set whatever PFC level is appropriate. For freight rail this means allowing freight rail lines to self-fund the system without government interference. And for passenger rail, this means only operating service in corridors which are commercially viable.

Next week we will examine transportation policy on a state level.

 

Nov 17, 2014 | 1 comment | by

The Gas Tax

The American Petroleum Institute’s Gasoline Tax interactive map allows users to check out each state and the United States average state excise tax, other state taxes/fees, total state taxes/fees and total state and federal taxes.

Some of the states with the highest federal and state gasoline tax include:

  • New York — 68.90 cents
  • California — 68.18 cents
  • Connecticut — 67.70 cents
  • Hawaii — 66.85 cents

Some of the states with the lowest federal and state gasoline tax include:

  • New Jersey — 32.90 cents
  • South Carolina — 35.15 cents
  • Oklahoma — 35.40 cents
  • Virginia — 35.68 cents
  • Missouri — 35.70 cents

The federal government adds 18.40 cents per gallon in each state. That federal tax is higher than the total state taxes for the states of New Jersey, South Carolina, Virginia, Oklahoma and Missouri.

High gasoline taxes from the states and federal government have a huge impact on gas prices at the pump. This is a heavy burden that the consumers are having to bear the brunt. The federal government and many states feel that the increased revenue from the gas tax is beneficial and that it will encourage less gasoline consumption and more alternative fuels/transportation. However, these excessive and usually unnecessary taxes directly hurt American consumers and damage the United States economy. This tax should be a really low flat tax across the nation creating a fairer and less burdensome tax, while still generating revenue for the states and/or federal government.

Oct 06, 2014 | 4 comments | by

The Importance of Reducing Congestion by Spotlighting One Intersection

Creating a redundant transportation system is crucial to reducing congestion and improving mobility. One of the most important projects in the Atlanta metro area is the reconstruction of the I-285/SR 400 intersection, identified for years as one of the top transportation projects in Georgia. I-285 and SR 400 are the two freeways which provide access to the Perimeter business area, home to the largest concentration of jobs in the Southeast U.S.

The Georgia Department of Transportation (GDOT) has wanted to fix this interchange for years but has lacked the resources. The interchange and collector distributor ramps on SR 400 (totaling a combined $700+ million dollars) were on the 1% transportation special purpose local option sales tax list in 2012. While the interchange had near unanimous support, other projects on the list were controversial causing the tax to fail. However, GDOT still needed to fix the interchange and because of worsening congestion in metro Atlanta it decided to add collector-distributor lanes in addition to the SR 400 ramps. This brought the total cost to $950 billion.

To fund the project the state is going to sell $130 million in bonds, use $81.5 million in gas tax revenue and use a design-build-finance approach with builder contributions to supplement other sources.

But not everybody is happy. Atlanta Urbanist has created a list of bogus reasons to oppose the project.

First, the article claims that the interchange is something Atlanta does not need because new lanes lead to induced demand. But the interchange reconstruction project is not building new lanes; it is rebuilding a functionally obsolete interchange. Second, induced demand is only created when new non-priced lanes are added to growing areas. GDOT has an official policy, adopted in 2007, of adding only priced lanes to Atlanta freeways. The agency is planning on adding priced lanes to both corridors but the variable pricing will prevent induced demand.

Second, the article claims that Georgia has a pedestrian death rate 25% above the national average. This high rate is a problem but we have no idea what is causing the rate without researching the cause. Atlanta Urbanist wants to spend the $950 million on pedestrian improvements. The problem with this logic is that GDOT is using federal gas tax money collected from drivers and intended to be used on highways. Since this money comes from drivers it is only fair it is used on highways. Also, this federal funding is supposed to be used for interstate purposes. There are a large number of vehicles on I-285 and SR 400 from other states such as Florida and North Carolina. I doubt many folks in the metro Atlanta area walked here from another state.

Third, metro Atlanta has a growing senior population and we need ways to better serve them including transit. I agree that Atlanta’s transit service is insufficient. But with most rail lines costing in excess of $2 billion, this is not enough funding to pay for a full line. The interchange rebuild that allows the addition of variably priced lanes will also provide a free virtual guideway for buses and vanpools. In fact, thanks to using managed lanes as a guideway, Atlanta could build and operate a comprehensive bus system for less than a third of the cost of building a comprehensive light rail system. Further, new technology such as the development of automated vehicles may allow seniors to drive longer. While such vehicles are not yet available, they will be in the future.

The I-285-SR 400 interchange project is the biggest bottleneck in the metro Atlanta area. Regardless of what anyone claims, rebuilding the interchange will do more to improve mobility than any other transportation project in Georgia.

Aug 11, 2014 | Leave a Comment | by

Stranded on “3-Mile Island”

It is 7am in the morning, and the second cup of coffee is just not cutting it. However, traffic congestion has been relatively smooth along the tollway and work is not too far away. Then, suddenly, traffic bottlenecks from several lanes down to two, and the quality of the road declines considerably. Essentially, a parking lot has been formed between one stretch of the toll road and another. In the Dallas Fort-Worth gridlock between the two George Bush Tollways is a daily occurrence for thousands who commute to work every morning.

Bottleneck Traffic

States around the country are looking for better ways to build roads, without taxpayer funds. Thus, a market for tollways has been created that has been able to keep up with the growing demand of growing metropolises. There are drawbacks to this growth as federal law from 1965 prohibits the removal of Interstate Highways in order to build tollways. Kay Bailey Hutchinson (D-Texas) authored a federal amendment to the same law in order to broaden the ban to include exist such as; turning an auxiliary lane, HOV lane into a toll lane or building a toll lane alongside the existing Interstate or State Highway. None of these are taxpayer friendly as the auxiliary and HOV lanes were originally paid for with tax dollars, and for them to become toll lanes would be an inexpensive way for toll companies to collect revenue at the hands of the taxpayers.

SH 161 in particular creates many problems for the taxpayers, toll associations, and the government to deal with. Because the stretch of road only is 3 miles, and is already a connector between two tollways it would be common sense to transform it into a tollway in order to improve traffic congestion and road safety. The road has minimal lighting and there are only two lanes in each direction which are severely deteriorated. One proposal that exists is sponsored by the Texas Department of Transportation (TxDot) which claims that for 3.7 million dollars it can open the shoulder as another lane to ease bottle necking. The loss of the shoulder would create many hazards for accidents along the road so TxDot would build dead end driveways along the road and increase the amount of tow trucks on call to move stalled vehicles quickly. This however is and can only be a short term solution. This does not repair the roads, or increase the amount of lighting, and without a shoulder the danger of the road could increase as drivers can no longer safely pull off at any given time. One long term solution is to build a lane alongside the free lanes in order to add lanes while giving the benefit of the freeway.

The budget is not what it once was because the funds supplied from the federal government relies directly on the gas tax which has not been raised from 18.4 cents per gallon since 1993. Due to inflation, more fuel efficient cars, and now electric cars the fund is getting smaller and smaller. The population of the DFW metroplex increases 1 person every 4 minutes and needs proper highway infrastructure in order to support the continued growth. These issues are not specific to Texas, and every state with a fast growing metroplex is suffering similar growing pains. In order to support this growth a comprehensive federal plan must be created soon or else the amount of goods and services being transported will continue to slow down.

Mar 17, 2014 | 5 comments | by

Rethinging the Way Transportation Infrastructure is Funded

States are taking matters into their own hands

It may come as a surprise to you, but there is a quiet revolution in transportation funding underway these days. Faced with a depleted Highway Trust Fund and uncertain prospects for more money from a deficit-conscious Congress, many states are taking matters into their own hands and aggressively pursuing more fiscal independence.

A survey we have recently conducted documents significant funding initiatives in 18 states. Some states have raised their gasoline taxes (MD, WY, MA, and VT). Others have shifted to a tax on fuel at the wholesale level (e.g.PA). Still others have enacted dedicated sales taxes for transportation (e.g. AK, VA) or floated toll revenue bonds (e.g. OH).

Feb 17, 2014 | 1 comment | by
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