Falling Gas Tax Revenues = Bad For Mass Transit
by Lewis DerkinsJuly 28th, 2008, 9:56 pm
Uh oh! Last week, I mentioned that taking cars off the roads will only hurt mass transit.
Today, The Wall Street Journal confirms my sentiments. The first sentence of this article says it all:
An unprecedented cutback in driving is slashing the funds available to rebuild the nation’s aging highway system and expand mass-transit options, underscoring the economic impact of high gasoline prices.
As a result, many such projects may have to be pared down or eliminated.
Well, no crap.
As I mentioned last week, over 15% of the gas tax pays for mass transit – specifically 2.86 cents off of every gallon is diverted to the Highway Trust Fund’s Mass Transit Account.
What a surprise that when cars leave the roads this ridiculous subsidy system that we’ve set up falls to pieces! We achieved our goal to disincentivize driving and it bit us in the ass – congratulations all around!
Roads are collective goods; they are available to and benefit everyone, and you cannot be excluded from using them. We shouldn’t be charging fees to use them - this is why we pay taxes. If we do charge for them, we should at least force everyone to pay their fare share for the goods they use – no matter the form of transit. Mass transit riders currently pay the least proportional share for the goods they use compared to other modes of transport.
Mass Transit is beneficial to society and needs to be expanded, and that’s why we need to quit funding it with gas tax revenues. This is completely backwards logic.
Let’s use gas tax funds to build big mass transit systems to entice people away from using the roads that pay for them. Eureka! We have a winner for stupidest idea ever!
Chalk this up there with Mayor Bloomberg’s moronic plan to congestion price the cars off the roads because congestion pricing will pay for mass transit when all the cars are gone and no more taxes are coming in…wait a minute…is that how it works?
Great job, morons.
If we’re serious about funding mass transit, pay it the respect it deserves, de-couple it from the gas tax, put the funds that drivers pay to use roads back into their maintenance, and establish a separate tax and fund for mass transit so that it is no longer dependant on the bizarre catch 22 that has it rooting for high gas prices to lure new riders, but secretly hating OPEC’s effect on driver consciousness because it kills their funding. That’s more psychologically twisted than poor Harvey Dent’s conundrum.
Not that this is a perfect solution since mass transit also feels the pain when the price of fuel increases – but at least we’re not robbing Peter to pay Paul with lint balls and rotten banana peels. We’ll know the true costs of everything, and we’ll be able to make responsible policy decisions based on accurate information. That’s fair for everybody.
It’s also time for our do-nothing congress in the big top across the Potomac to re-prioritize the way we spend our money. According to this article, we’re $225 Billion deficient in funding our infrastructure. Do we need another I-10 bridge collapse and 13 more people dead before we realize we don’t need $5 Billion in corn subsidies or a $21 Billion No Child Left Behind program?
Posted in Congestion Pricing, Gas Prices, Gas Taxes, Highways, Mass Transit, Tax Increases, Uncategorized Rage |
“Mass transit riders currently pay the least proportional share for the goods they use compared to other modes of transport.”
–Er this isn’t true at all.
Why, because you say so?
See: http://www.flickr.com/photos/74135535@N00/2334376360/
In this graph the value above the line represents the out-of-pocket cost per trip, per person for each mode of transportation, the value below the line accounts for subsidies, environmental impact, social and indirect costs. When cities charge market rates for on street parking and municipal parking garages, and when bridges and tunnels are tolled for these modes, driving becomes less competitive in terms of out-of-pocket costs than other modes of transportation. When parking is underpriced and roads are not tolled, the shortfall in tax expenditures by drivers, through gas tax and other taxes amounts to a very large subsidy for automobile use. The size of this subsidy for cars dwarfs the federal, state, and local subsidies for the maintenance of infrastructure and discounted fares for public transportation.
Graph based on data from Transportation for Livable Cities By Vukan R. Vuchic page. 76. 1999. ISBN 0882851616
Bird, I just wanted to throw up the full image here, so everyone can see what we’re debating. Stay tuned for a full analysis. This is going to be fun.
thebird -
You’re right about one thing - there is a form of transportation that is subsidized more proportionally than mass transit - bicycles.
This graph isn’t very convincing. First of all, are you honestly trying to tell me that rail tranist has no social or environmental costs? What runs the trains, magic? Are you telling me there are no indirect user costs? What organization runs the MTA and administers all of the fares and schedules? Why do we have to have a metro police force? What about the land the government seizes to construct these systems? What about the congestion that they cause - people tend to like to develop the areas around the lines?
Second, I notice that we have to stack the deck with parking and tolls to make the car appear worse from the user’s prospective. I’ve heard the subsidized parking argument before, but it’s based on a false premise - you already pay for that parking.
At the store, it’s built into the cost of the goods you buy. When your job gives you free parking, they’re just paying you less to offer it. And when the government offers it, they’re doing it to try to stimulate some kind of development that enhances the tax base - if they offer it for free, which they don’t in most cases. The idea that parking is subsidized is false.
Third, the only reason that this number is low is that the total investment in mass transit is comparatively small. That may equate to a low dollar per person ratio, but it isn’t a low percentage of trip subsidized ratio. The overall trip is subsidized at a much higher percentage than automobiles, but since there are fewer riders to subsidize and the systems are smaller, it appears that it is a cheaper trip.
If you look at those numbers based on the users of the systems and the revenues derived from their use, they come out a bit differently - here’s a post I wrote on the topic:
http://www.commuteroutrage.com/2008/07/26/who-pays-their-own-way-in-new-york/
FYI, we have also written a little on the pricing of parking, which you can reference here.
http://www.commuteroutrage.com/2008/05/27/why-the-automobile-will-never-die-part-ii/#comment-1226
Even without the parking costs (which do make sense) the car still costs more. You should check out the book this came from. Rail has an environmental impact, of course– but, it’s too small to show up when you look at it for a single trip for a single rider.
“When your job gives you free parking, they’re just paying you less to offer it.”
Lewis,
They’re paying you less whether you use the parking or not. I hate to break it to you, but not everybody drives to work, even in the United States.
Here’s an example that illustrates the how the concept of employer-paid parking distorts the market for travel.
My friend works in downtown Stamford, Connecticut, a three- or four-block walk from the busy train station there. His company, like most others, allows employees to park for free in the building’s parking garage. But my friend takes the train because he needs to be at work promptly in the morning and I-95 is usually backed up with traffic and is unreliable.
He has to pay the train fare out of his own pocket. The company subsidizes his car travel, but not his train fare. He’s helping to reduce congestion, air pollution, and our national trade deficit, but he getting penalized for it.
What do you think would happen if he went to his boss and said: “You know the money our firm pays to get access to the garage? I don’t use my space. I’d like to have my share of that in cash.”
“What about the land the government seizes to construct these systems?”
If land seizure is your primary concern, you should really be up-in-arms about highway growth. Moving automobiles consumes a lot more land than moving people, and highways take up a lot more land than mass transit systems.
“Why do we have to have a metro police force?”
Why do we have to have the California Highway Patrol? Why do we have to have State Police forces?
“What about the congestion that they cause - people tend to like to develop the areas around the lines? … [W]hen the government offers it [free parking], they’re doing it to try to stimulate some kind of development that enhances the tax base. ”
So tight-knit, walkable communities where people are free from dependence on Saudi Arabian oil is something you consider “congestion,” but stimulating energy-thirsty, agriculture-consuming sprawl is worth pursuing for the tax rateables?
“At the store, it’s [free parking’s] built into the cost of the goods you buy.”
Not to beat a dead horse from my previous post, but I walk to the store. Can I get a lower price on that tuna please?
Jeb -
On your first comment in response to what your friend should do - perhaps he should take it up with his boss.
Many companies here in DC have programs to compensate you for using mass transit - in fact the entire federal government has the full cost of their rides subsidized.
In your example, is the garage owned by the company or a third-party contractor?
If it’s owned by the company, then I reiterate, the company just pays you less for the privilege of using the facilities. Saying “I don’t want my share” is a fair point to make in salary negotiations, but I would be willing to bet that it won’t get you very far. What if you don’t want your share of the paid childcare, or the fitness facilities, or the company food court? The company will keep them anyway, and all the employees take a little less pay home to make them possible, whether you use them or not.
If it’s owned by a third party, then your friend doesn’t get reimbursed because his company doesn’t pay unless he parks there.
But if your friend is a savvy negotiator, he may be able to pull it off, and I would say it’s worth it to try.
This ties in to your second comment - the problem with the point you’re making is that you choose what grocery store to go to, and you know the prices. The fact that overhead is built in doesn’t mean you can select out the stuff you don’t want to pay for. Just like you won’t get far by telling your boss to increase your pay because you don’t want to use the company gym, you’re not going to go into the supermarket and get discounts for overhead you don’t want to pay for.
Asking to pay less for tuna because you didn’t drive is equivalent to bringing your own flashlight to the store, asking them to turn off the lights and deduct the cost of the electricity you just saved them. The store isn’t going to accommodate one individual - they are going to cater to the majority of their customers. And the choice you have is to go to another store without a parking garage that is built into the overhead.
Your other questions miss my point - I’m not saying that we don’t have those expenditures for cars, I’m saying that it’s ridiculous to try to stack the deck in mass transit’s favor by excluding those costs from their tally in this graph. Those state police also patrol the bus routes and protect those passengers - why not count them against the buses too?
Densely packed communities don’t reduce traffic, congestion, pollution or consumption. In fact, the opposite is true on all counts. Densely populated communities require more resources, and they have to be imported from far away because the dense population can’t grow it’s own food - they have no land. You can lament our “agriculture consuming sprawl”, but your walkable communities couldn’t exist without it. And all of that food has to be shipped in, and people still have to have a way to transport it. This creates congestion that comes with a cost that should be partly attributed to mass transit.
thebird -
Another of our readers has actually recommended Vuchic’s work to us, and we are in the process of checking it out.
“Densely populated communities require more resources.”
Lewis, this is totally false. Far fewer resources for transportation, far fewer resources in home heating and cooling and electricity. Lower infrastructure needs.
http://www.greenbelt.org/downloads/resources/newswire/newswire_11_04GreenManhattan.pdf
You missed my point about agricultural lands. Of course everybody needs them. It’s just that sprawl consumes it and cities allow it to remain.
Jeb -
You’re only talking about household energy consumption - and I’ll grant you that per capita it is lower in the city.
However - that comparison isn’t exactly accurate for two reasons:
The article you point to is a great example of the first reason - you’re making a wrongful comparison of dissimilar situations. No doubt the author used more energy when he moved, but he also moved into a bigger house. You have to compare the energy use in the same types of buildings in the different locations. Here’ you’re likely to find consumption is the same.
The second problem is that by only looking at household consumption, you are forgetting about all of the other areas of consumption that have to be taken into account - for example, the energy that powers all of the shops, restaurants, common areas, mass transit, streetlights, stadiums, public works, etc…There are a lot more of those things in walkable cities than in suburbs or rural areas.
It’s not just your personal energy use that has to be taken into account - it’s the total energy required to power a city versus power a small town or a suburb.
The argument you make - far fewer resources for transportation and infrastructure - is completely false on its face. Look around you - there is a lot more “stuff” in the city than in the suburbs, and it costs a lot more to build it. Just because you don’t pay an up front cost to use it doesn’t mean there isn’t an imbedded cost in your taxes.
I did miss your point about agricultural lands, but I wouldn’t exactly say that we’re building sprawl at the expense of our argicultural capacity. We’re not exactly starving, and in fact we produce way more food than we need.