Texas Dept. of Transportation on how much road gas taxes pay for
- An interesting web page from the Texas Department of Transportation on
how much of road'sconstruction/upkeep is actually paid for by gas taxes:
Do Roads Pay for Themselves?
1. What is a traveler paying for when he or she pays state gas tax at
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
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.
Montreal QC Canada
[Non-text portions of this message have been removed]
- 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
> An interesting web page from the Texas Department of Transportation on
> how much of road'sconstruction/upkeep is actually paid for by gas
>Clipped most of text for clarity :-)
> It would appear from those statistics that even those who=v= If I understood this correctly, you're saying that motorists
> drive motor vehicles and pay fuel taxes and property taxes
> just as many of us cyclist pay, also do not pay for the road.
don't pay the full costs of their mode of transportation, even
when you add in their contributions to the general revenue? I'm
=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!
- On 10 Jul 2008 at 20:55, Christopher Miller wrote:
> Just like your car, it never is. You may have paid the note, butIn the UK, taxation from motorists used to be ring-fenced and used for
> 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.
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
- 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