Think Roads Pay for Themselves? Think Again

highway_funds_chart.png
Image: Subsidyscope

The myth that U.S. roads “pay for themselves” thanks to user fees is a subject that’s likely familiar to many Streetsblog readers — but just how much of the nation’s highway funding is provided by charging drivers?

The answer may surprise even active critics of the current asphalt-centric transportation system. Between 1982 and 2007, the amount of federal highway revenue derived from non-users of the highway system has doubled, according to a study released today by Subsidyscope.

Analyzing Federal Highway Administration data dating back to 1957, the dawn of the Interstate system, Subsidyscope researchers found that non-users of the highway system contributed $70 billion for nationwide road construction and maintenance in 2007. In 1982, by contrast, highway contributions from non-users totaled just $35 billion (in 2007 dollars).

Today’s study also found that the share of road funding generated by user fees fell to 51 percent in 2007, down from 61 percent just a decade earlier. (The accounting used by Subsidyscope, a joint project of the Pew Charitable Trusts and the Sunlight Foundation, accounted for the use of about one-sixth of federal gas tax revenue to pay for transit.)

What has caused the government’s increasingly rapid dependence on non-road user fees — which more often than not take the form of direct transfers from the Treasury — to pay for roads?

Subsidyscope points out that the federal gas tax has stayed stagnant since 1993, rapidly losing value as inflation climbs, but the growing popularity of bond issuances as a way to pay for new roads is also a factor. According to Subsidyscope’s research, the value of new bonds issued to pay for highways reached $24.7 billion in 2007, up from just $6 billion in new bonds issued in 1982 (converted to 2007 dollars).

Bond offerings, which often represent states and localities playing a greater role in transportation planning, do not guarantee that users will be paying for new highway construction — rather, bonds depend on market conditions to allow a successful leveraging of debt, and the recent economic downturn has forced many governments to limit their bonding plans.

ALSO ON STREETSBLOG

STREETSBLOG USA

Study: Most Roads Don’t Pay for Themselves

|
Most American roads — even the most highly trafficked — are financial losers. That’s a major finding from a new study by the Center for American Progress [PDF]. A financial analysis by the think tank found that about four out of 10 U.S. highways don’t carry enough traffic to generate sufficient revenue to pay for their maintenance […]
STREETSBLOG USA

Six Lies the GOP Is Telling About the House Transportation Bill

|
The transportation-plus-drilling bill that John Boehner and company are trying to ram through the House is an attack on transit riders, pedestrians, cyclists, city dwellers, and every American who can’t afford to drive everywhere. Under this bill, all the dedicated federal funding streams for transit, biking, and walking would disappear, leading to widespread service cuts […]

Fred Barnes: Americans Mainly Want to Stay in Their Cars

|
After yesterday’s electoral drubbing, the Obama administration will have to deal with a starkly different Congress when they make their expected push for a multi-year transportation bill early next year. We know that some influential House Republicans, like John Mica, don’t necessarily believe that bigger highways will solve America’s transportation problems. And we know that […]