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Texas Dept. of Transportation on how much road gas taxes pay for

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  • Christopher Miller
    An interesting web page from the Texas Department of Transportation on how much of road sconstruction/upkeep is actually paid for by gas taxes:
    Message 1 of 5 , Jul 10 5:55 PM
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      An interesting web page from the Texas Department of Transportation on
      how much of road'sconstruction/upkeep is actually paid for by gas taxes:

      http://www.keeptexasmoving.com/index.php/news/Do_Roads_Pay_for_Themselves%3F

      ==========================================================

      Do Roads Pay for Themselves?
      1. What is a traveler paying for when he or she pays state gas tax at
      the pump?

      State motor fuel tax is collected from all over the state and goes
      into a single pool of revenue�about one quarter of which goes to fund
      education, and about three-quarters of which goes to the state�s
      highway fund, where it is spent on transportation uses and some non-
      transportation functions of government.

      Then the state receives federal funds as the state�s share of the
      federal fuel tax; about 70 cents of every gas tax dollar Texans send
      to Washington comes back for road use.

      The significant point here is that historically the fuel tax paid in
      any locality of the state is unrelated to the road projects in that
      locality. Every fuel taxpayer in the state paid something for any
      given road�which leads to the next issue.

      2. When is a given road actually �paid for?�

      Just like your car, it never is. You may have paid the note, but
      maintenance and fuel costs go on as long as you own the vehicle. Once
      a road is built, maintenance and rehabilitation costs last its entire
      life, generally about 40 years.

      The decision to build a road is a permanent commitment to the
      traveling public. Not only will a road be built, but it must also be
      routinely maintained and reconstructed when necessary, meaning no road
      is ever truly �paid for.�

      Until recently, when TxDOT built or expanded a road, no methodology
      existed to determine the extent to which this work would be paid off
      through revenues.

      The Asset Value Index, was developed to compare the full 40-year life-
      cycle costs to the revenues attributable to a given road corridor or
      section. The shorthand version calculates how much gasoline is
      consumed on a roadway and how much gas tax revenue that generates.

      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.

      ==========================================================

      Christopher Miller
      Montreal QC Canada



      [Non-text portions of this message have been removed]
    • fred_dot_u
      It would appear from those statistics that even those who drive motor vehicles and pay fuel taxes and property taxes just as many of us cyclist pay, also do
      Message 2 of 5 , Jul 10 6:37 PM
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        It would appear from those statistics that even those who drive motor
        vehicles and pay fuel taxes and property taxes just as many of us
        cyclist pay, also do not pay for the road. It's one of those comments I
        hear from people who think bicycles don't belong on the road "because
        they don't pay the same taxes." I'm going to have some good-natured fun
        the next time someone tries that line on me.


        --- In CarFree@yahoogroups.com, Christopher Miller
        <christophermiller@...> wrote:
        >
        > An interesting web page from the Texas Department of Transportation on
        > how much of road'sconstruction/upkeep is actually paid for by gas
        taxes:
        >
        >
        http://www.keeptexasmoving.com/index.php/news/Do_Roads_Pay_for_Themselve\
        s%3F
        >
        > ==========================================================


        Clipped most of text for clarity :-)
      • Jym Dyer
        ... =v= If I understood this correctly, you re saying that motorists don t pay the full costs of their mode of transportation, even when you add in their
        Message 3 of 5 , Jul 10 8:09 PM
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          > It would appear from those statistics that even those who
          > drive motor vehicles and pay fuel taxes and property taxes
          > just as many of us cyclist pay, also do not pay for the road.

          =v= If I understood this correctly, you're saying that motorists
          don't pay the full costs of their mode of transportation, even
          when you add in their contributions to the general revenue? I'm
          not surprised.

          =v= We've long known that motorist taxes and fees (car and gas
          taxes, registration fees, tolls, fines, etc.) don't cover their
          costs, and the shortfall comes from the general revenue. You'll
          hear rants (often on motorist-pandering drive-time radio) about
          motorists having all sorts of entitlements because they pay so
          much, and indeed they *do* pay a lot, but it still doesn't cover
          their costs. Stanley Hart in particular did some work on costs
          that are overlooked, and one huge sector is emergency services
          and law enforcement. Motorist-panderers make a big fuss over
          parking and speeding tickets ("revenue enhancement," they say),
          again overlooking the fact that this doesn't cover costs.

          =v= The general revenue is usually mostly based on property
          taxes, and based on property values. Property values are
          generally highest in urban areas, which are the most carfree
          places of all. So the carfree not only subsidize motorists
          by not costing nearly as much as they do, but carfree urban-
          dwellers give them disproportionately greater subsidy, since
          we're being taxed at a higher rate to pay for them!
          <_Jym_>
        • David Hansen
          ... In the UK, taxation from motorists used to be ring-fenced and used for roads. However, this only ever paid for up to 50% of the cost of *improvements* to
          Message 4 of 5 , Jul 11 1:50 AM
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            On 10 Jul 2008 at 20:55, Christopher Miller wrote:

            > Just like your car, it never is. You may have paid the note, but
            > maintenance and fuel costs go on as long as you own the vehicle. Once a
            > road is built, maintenance and rehabilitation costs last its entire life,
            > generally about 40 years.

            In the UK, taxation from motorists used to be ring-fenced and used for
            roads. However, this only ever paid for up to 50% of the cost of
            *improvements* to main roads (and up to 25% of the cost of
            *improvements* to lesser roads), the rest came from general taxation.
            Maintenance of roads always came out of general taxation.

            There is another issue. In the UK public assets are expected to earn a
            return on the investment. IIRC 8% is still the figure that is used.
            Given that there are very few tolls in the UK this money has to come
            from taxation. All taxation on motorists amounts to less than this 8%
            return, leaving nothing for work on the roads.

            As was said by the former chairman of a railway freight operator in the
            UK, roads are the last great Stalinist enterprise.







            --
            David Hansen, Edinburgh
            I will *always* explain revoked encryption keys, unless RIP prevents
            me
            http://www.opsi.gov.uk/acts/acts2000/00023--e.htm#54
          • vurt456
            This is a great article, thanks for posting it. I get so frustrated with people who demand that public transit/bike lanes/etc. need to pay for themselves
            Message 5 of 5 , Jul 11 6:21 AM
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              This is a great article, thanks for posting it. I get so frustrated
              with people who demand that public transit/bike lanes/etc. need to
              "pay for themselves" when it's obvious that roads don't pay for
              themselves either!

              Michelle
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