Report: Road Funding From Non-Road Users Doubled in 25 Years

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 last week 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).

The
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.

  • Thanks for posting this. Just for clarification–San Francisco city roads, the kind bicycles actually travel on, are paid for out of . . . (Bonds? General San Francisco annual budget? Revenues for this come from sales taxes? Other sources?)

  • The Department of Public Works budget unfortunately lumps “Work Orders/Bonds/Grants” together as the single source of most (67%, $117 million) of its funding instead of breaking it down further. http://www.sfgov.org/site/sfdpw_page.asp?id=105285

    But it does reveal that $18.5 million in additional revenue comes from gas tax, providing a relatively small proportion of $58 million of road-related expenses. The surprise to me is that $37 million of that is just for street cleaning, dwarfing what is spent on actual construction and repair.

  • Thanks for that link. It’s interesting. It mentions a $368 million Road Repair and Safe Streets bond measure that was supposed to be on the November ballot, but as I recall, no such measure made the ballot. Did it get postponed? Since a bond is essentially borrowed money, I assume the money to pay it back over time would come out of yearly general tax revenues?

    Because I was curious, I spent some time just now digging into San Francisco’s massive 6.6 billion dollar budget. What a monstrosity. Because it’s so complex (it includes the airport! museums! Hetch Hetchy! our port!) it’s really hard to get a grip on income and expenses. (Maybe this is intentional?) There are at least two places where gas sales taxes are factored in, and multiple places where expenses for street repair and maintenance are allotted. (It looks to me like both equipment and any materials used are in separate categories and not in the repair line item.)

    So it’s very difficult to tease out just exactly what is spent on repairing and maintaining the roads and how much of that might be covered by gas taxes. In addition, some road repair in SF is being paid for right now with federal stimulus monies (funded by sheer deficit!) further obscuring who is paying for what. It’s also not clear what the funding source is for a major road overhaul that goes beyond mere repair and might rather be considered a capital renewal or a capital project.

    I bet if someone in the city budget office was motivated,it could all be delineated clearly. It doesn’t seem unreasonable to want to know how much our roads cost and how they are being paid for. It’s clear that the bulk of our monies for city services come from property taxes (sales and business tax revenues pale in comparison.) This is why, when property values fall, the city budget takes a beating. (Not to mention the slash and burning the state did with revenue sharing.)

    I, too, am surprised at how much we spend on street cleaning, though without the cleaning, San Francisco would no doubt get unpleasant quickly.

  • @taomom,
    The Board of Supervisors never introduced the bond after it appeared there wasn’t enough support even within its own ranks to get it on the ballot. Unfortunate for daily users of our terribly paved streets, but perhaps good in the long term because we don’t punt the bond debt down the line?

  • peternatural

    Thanks for the info, Eric and taomom! I’ve been really curious about that.

    Maybe it would be slightly easier to estimate: (1) how much total revenue is collected in gas taxes, and (2) how much total is spent on roads and highways in the U.S. (including all levels of government).

  • What’s a “user fee”? Is most of that coming from gas taxes? I can’t imagine tolls are generating tens of billions a year, but maybe I’m wrong.

  • doug

    Thanks for that story and Eric, thanks for the link. I am surprised to see that while most things in the budget are getting cut, construction management is actually going up!

    http://www.sfgov.org/site/uploadedfiles/sfdpw/director/DPWbudgetfactsheet2009-10(1).pdf

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