GA Legislature: Correlating the Gas Tax with Road Costs

From the AJC’s low-hanging fruit “ACK! MORE TAXES?” article this morning…

As gasoline prices climb rapidly past $3.30 a gallon, the Legislature is considering a change in the state’s gas taxes that could well push the price even higher.

The change, part of a sweeping proposal to overhaul the state’s taxation system, would address a huge problem in Georgia transportation funding: Much of the state’s gas tax does not rise with inflation. Under the bill introduced last week, that would change.

The complex proposal does have a possible upside for drivers’ pocketbooks, sort of. If the price of gas went really high, although the total revamped gas tax may still go up, it could go up less than if legislators make no change.

According to the article, currently the gas tax is 50% a flat 7.5 cents/gallon and 50% a “per-gallon charge that changes according to the price of gas”.  The proposed tax currently before the legislature would line up both portions of the tax with the annual cost of road construction.  As of 2011, that would equate to a 6 cent increase in the tax.

Arguments against include…

“I really don’t want to pay more than what I’m paying now,” especially considering the rising price of gas, said Marc Cain, 36, of Conyers. “It comes off as 5 cents but that adds up over everyday travel.”

Ahh…OK.  Well, then sir, can you choose which roads and/or bridges we’ll be shutting down or neglecting in the coming year?  Yeah.  But seriously, this sounds like a pretty decent proposal, if it operates as intended.  Tie the cost of roads to the tax annually.  If people want to push the tax down, they’ll be faced with the immediate result of less road maintenance.

Nothing’s ever as easy in politics as it first appears, but I’m having trouble finding reasons not to really like this idea (which usually means it doesn’t have a snowball’s chance of being passed).

Roads Don’t Pay For Themselves Either

Road advocates often get worked up about the fact that public transportation systems, like MARTA, don’t pay entirely for themselves through user-fees (aka fares).  Currently, MARTA’s ridership fee covers about 32% of costs to run the transit system.  As many of you are aware, much of the remainder is paid for by a 1-cent sales tax in DeKalb and Fulton counties.

The common continuation of this critique usually points to roads and highways as a better model of user-fees (aka the gas tax) paying for a large majority of the transportation costs..  But a recent study just released by the U.S. Public Interest Research Group (U.S. PIRG) hope to disprove this point.

First, as the graph above shows, only around 50% of highway funding is currently off-set by user-fees.  And over the last 50 years that number has continued to fall, mainly because the gas tax isn’t adjusted for inflation.  And the future outlook looks even worse.  Not only do cars continue to become more fuel-efficient, and drivers end up paying less annually in gas taxes for the same number of miles driven, but people are driving less than in previous years.  Oh, and then there’s this lovely Catch-22…

On one hand, for a new or expanded highway to “pay for itself,” it must result in a significant overall increase in miles driven and fuel consumption. On the other hand, however, increasing the number of miles driven on a highway undercuts the most common rationale for highway construction: reducing congestion. Indeed, if a highway expansion project truly succeeds in reducing congestion, motorists will sit less in traffic and burn less fuel—reducing gasoline tax revenue.

So while we will continue to argue the pros/cons of all transportation options, it seems pretty clear that the pay-your-way argument doesn’t really pan out for ANY current transportation method. And if the current popular conception is to deem all forms of transit a “social program”, than roads and highways should also carry that label.

h/t: LandMatters

Will $4 Gas Soon Be the New Norm?

Remember how much of a fuss we made about $3/gallon gasoline?  Man were we irritated.

Well, guess what.  Gas is $3 again.  Where’s the panic!?   Where are the angry op-eds?  The Twitter #gasgriping?  The Facebook status updates of gas price-induced fury?

Ya know, human adaptation sure makes us look like a bunch of over-reactionary liars sometimes.

But luckily, I see a return of media (social or non-social) angst just over the horizon.  The AP kicked off the New Year announcing that gas price experts are predicting the price of gasoline will get up in the $4/gallon range in up to 15 states by Memorial Day, thanks to a recovering U.S. economy and China’s increasing need for oil.  (No need to worry here in Georgia in the short-term.  That arbitrary new .00-mark will only be reached in states with the most aggressive gas taxes.)

And while you could argue that ho-hum $3/gallon fuel HAS had an impact on the nation’s psyche – propelling the population back to the city and influencing the % of teens with driver’s licenses – these effects surely didn’t live up to all the hype.

In that regard, will $4 gas prove to be more of the same?  Promises and predictions of drastic changes to our daily lives followed in short-order by slight, actual changes by the population-at-large.  Or will it amount to something else?  Will majorities once adverse to public transit suddenly stick a MARTA Breeze Card in their purse or wallet?  Will ‘burban families start ponying up for electric vehicles?  Will “stay-cations” become so common that we’ll never have to hear or read that ridiculous word again?

I don’t have the answer, but if I were a betting man I’d probably putting my money on the former.

And You Thought MARTA’s Problems Were Bad…

MARTA’s had a lot of bad press lately, thanks to a sales tax shortfall and a do nothing legislature, so I thought it would be only fair to give a little equal time to our insolvent highway fund.

This morning’s NY Times reports that the Federal Highway Fund is insanely low on cash and desperately needs to be revamped, since it’s no longer paying for itself.  However, it’s still unclear whether Congress will make the change.

The most contentious question – how to pay for it all – took on a new urgency this week when officials announced that the source of most transportation money would run dry this summer for the second year in a row.

The bulk of the money in the federal Highway Trust Fund comes from the federal gasoline tax, as well as from a tax on truck sales. Lawmakers said they might be forced to bail out the fund in August with $5 billion to $7 billion from general tax revenues, just a year after they provided it with an $8 billion bailout.

Oh, and here’s the best part!

The federal gas tax is not a percentage of the amount of money spent, like a sales tax, but rather a flat 18.4-cent tax levied on each gallon of gasoline sold. It has not been raised since 1993, even as the price of gas has doubled. Officials also say inflation has eroded about a third of the tax’s purchasing power since 1993.

Unlike MARTA, the Federal Highway Fund can be bailed out quite easily by it’s namesake, avoiding much of the press and criticism that comes with having to publicly appeal to an unsympathetic legislature.  Thank goodness!  Now everyone can go on thinking that roads just pave and build themselves, while scorning public transportation for being the supreme model of high costs and low efficiency.