Wednesday, May 13, 2009

Roads lose billions annually

Transit haters talk of how much public transportation loses and the public subsidy they receive, but they almost universally ignore the money lost on roads and highways and the public subsidy they receive. From the Texas Department of Transportation...

[An analysis of road building and maintenance costs] 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.
Props to Bicycle Fixation.


Brent said...

And, by contrast, mass transit can in theory be made profitable, with people expecting to buy a ticket, rather than the funding source being hidden away in a tax.

India subway "operationally profitable":
Singapore transit makes "record net profit":
Japanese subway "profitable":
French rail profitable:
Spanish AVE has to be run profitably:

Tony Bullard said...

OK, but that doesn't take into account the money that people make at their job that they use the road to get to and then spend that money back into the economy. A large road can help a growing city grow, which would help the city as a whole. And of course there's sales tax...

I still totally believe in Mass Transit, but I think those numbers are kinda weak.

Bryan Willman said...

Be careful what you wish for.

Today bicycles and pedestrians don't pay direct taxes (like gas taxes) - and it's better that they don't.

Also, the arguments about what is paid for by fees and direct taxes (gas taxes, etc) is a bit silly. Society could not function without roads (they predate cars) - so in some sense their value is infinite.

As Tony Bullard suggests, just counting gas taxes, etc. isn't a good accounting. What about the property taxes for land that would otherwise be useless or much less valuable? What about income taxes and various retail taxes that depend on the scale of economic activity the road supports.

(All of these arguments can apply to mass transit, bicycle transit, and pedestrian friendly infrastructure as well. Indeed, most of them apply to airports.)

Stephen said...

Texas spends a lot more on roads than they have to. I love the roads here compared to other states, but there's so much waste in painting concrete embankments, brand new lawn mower tractors, and huge visitor centers that any statements by TxDOT should be taken with a grain of salt.

Anonymous said...

seems to be a bit misleading.

clearly there are roads that have paid for themselves many times over that now fund other parts of the system.

texas has been carping for years that they do not get back what they contribute re: gas taxes.

to me the core problem is that one size does not fit all, and our transportation funding system is completely inflexible. any time we send $$ to washington, it is a gamble as to how it will come back (and how much will come back) and with what strings. why make the round trip? transportation is largely local and regional. in the case of national priorities, this makes sense. ports? interstate highways? but why should people who pay to drive and commute in the bay area pay for boston commuters? and worse, why should we be bound to federal regs and constraints to improve our own transportation system? it's an odd system that seems to me to be very archaic.

what works in california, or even in PARTS of california like the bay area, might be completely unfeasible elsewhere. i'd like to see more bike lanes. but does rural texas need bike lanes? seems odd to mandate that we have roads, and they have bike lanes. and then expect our politicians to figure this out. truly, they are not that smart. :) and even worse to expect california $$ to fund projects in boston, ny or florida.