But cars pay for the road they use... ya, right.
Recently we ran some numbers for a small road project here in Cincinnati that would normally never get any attention or second thought by the voting public.The project totaled $2.4 million and was a street resurfacing for a small stretch of road - pretty typical. We ran the gas taxes paid by the amount of users based on average traffic counts. In the end this small project would take some 630 years to pay off with usership fees (gas taxes). Similarly we ran the numbers on the much larger "Thru The Valley" project that will spend hundreds of millions of dollars to repair/upgrade I-75 through the heart of Cincinnati. When factoring in traffic counts with trucks counted separately (they pay higher taxes), we figured it never be paid off with a discount rate, 80 years to pay off with traffic growth and 123 years to pay off without traffic growth.
In the time it will take to pay these projects off they will have been repaired and replaced several times over resulting in the same net loss right from the get go. The point is not that roadways shouldn't be maintained and repaired, it's just that when you hold roadway projects to the same standard as transit it seems ridiculous.
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This latest trend is one more straw in breaking the back of the gas tax as a preferred transportation funding method. Although gas taxes are the largest single source of transportation revenue, we have been moving away from them. Even before the recent rise in gas prices, federal and state gas taxes supplied only 35 percent of the $132 billion in federal, state and local highway funds.
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The Asset Value Index is the ratio of the total expected revenues divided by the total expected costs. If the ratio is 0.60, the road will produce revenues to meet 60 percent of its costs; it would be “paid for” only if the ratio were 1.00, when the revenues met 100 percent of costs. Another way of describing this is to do a “tax gap” analysis, which shows how much the state fuel tax would have to be on that given corridor for the ratio for revenues to match costs.
Applying this methodology, revealed that no road pays for itself in gas taxes and fees. For example, in Houston, the 15 miles of SH 99 from I-10 to US 290 will cost $1 billion to build and maintain over its lifetime, while only generating $162 million in gas taxes. That gives a tax gap ratio of .16, which means that the real gas tax rate people would need to pay on this segment of road to completely pay for it would be $2.22 per gallon.
This is just one example, but there is not one road in Texas that pays for itself based on the tax system of today. Some roads pay for about half their true cost, but most roads we have analyzed pay for considerably less.
To conclude, in the SH 99 example, since the traffic volume for that road doesn't generate enough fuel tax revenue to pay for it, revenues from other parts of the state must be used to build and maintain this corridor segment. The same is true across the state, meaning that, as revealed by the tax gap analysis, overall revenues are not sufficient to meet the state’s transportation needs. .
Sources:
<a href="http://www.livablestreets.com/projects/streetsblognet/lists/streetsblognet-discussion/archive/2009/05/1242142504733">http://www.livablestreets.com/projects/streetsblognet/lists/streetsblognet-discussion/archive/2009/05/1242142504733</a>;
<a href="http://www.governing.com/articles/0512trans.htm">http://www.governing.com/articles/0512trans.htm</a>;
<a href="http://www.txdot.gov/KeepTexasMovingNewsletter/11202006.html#Cost">http://www.txdot.gov/KeepTexasMovingNewsletter/11202006.html#Cost</a>;
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