BIKE: Taxing cars by the miles

[Roger Baker]

Don't worry. Every clever creative highway funding scheme both here and 
in California is similar to discussing the best way to arrange the deck 
chairs on the Titanic.

The whole economics of highway construction is teetering and will crash 
not too long after world oil production peaks (by 2010 or probably 
sooner). The reason that gasoline prices are up so sharply already is 
that while oil production is still growing for now, it still cannot 
grow enough to keep up with demand expanding even faster, when oil 
demand is largely inelastic.

Oil is back up to about $50 again and should continue to rise unless 
and until it triggers a world recession. But the dollar is about to 
fall sharply, probably, thus significantly increasing the cost of oil 
from another direction. This cost impact will make current road funding 
problems look small. Just look at the charts of crude oil prices (like 
Nymex) over the last year.

The immediate problem is that TxDOT hands out billions in road 
construction funds each year to contractors who represent some of the 
most powerful lobbies in the state of Texas. In Texas roads are pure 
politics. The TTC appointees who dispense the gravy are nearly all rich 
friends of the Texas governors who appoint them.

I challenge anyone reading this to find a SINGLE Texas Transportation 
Commissioner who has ever had a background in transportation planning 
that would properly qualify them to manage a $6 billion a year 
transportation bureaucracy. Nearly all their votes are unanimous.

The end result is that right now TxDOT is trying to massively increase 
the rate of road building -- via deficit spending involving tax-free 
municipal revenue bonds to build decades worth of future roads as toll 
roads. The best explanation I can come up with is that they want to 
float the bonds fast, before fuel prices soar further and the bond 
house investors catch on.

The theory that American drivers are insensitive to gasoline prices is 
largely true over the short run but not over the long run, as the sharp 
fuel price increases during the 1970's demonstrated. When prices pinch 
their wallet, drivers eventually buy smaller cars or move closer to 
work or shift to alternatives like bikes.  -- Roger




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On Nov 25, 2004, at 7:02 PM, John SomdeCerff wrote:

> I'd vote for increasing the gas tax AND taxing heavy trucks (anything 
> including Hummers over 6,000 pounds GVW) based on weight and distance. 
>  I've read that the "hidden costs" due to pollution, etc. of burning 
> gasoline are on the order of $1/gallon.  The hybrids tend to be 
> cleaner, so its OK that they don't pay as much.
>
> Roger Baker wrote:
>
>> [Hey, wow. This would both discourage suburban sprawl and encourage  
>> bicycle use at the same time -- so lets run it up the flagpole here 
>> in  Texas!
>> SACRAMENTO - Gov. Arnold Schwarzenegger on Monday appointed a new  
>> Department
>> of Motor Vehicles director who has advocated taxing motorists for 
>> every  mile
>> they drive - by placing tracking devices in their cars.
>> The idea would mean a significant overhaul of how California collects 
>>  taxes
>> to maintain its often-crumbling roads. Under the plan, the state gas  
>> tax -
>> now 18 cents a gallon - would be replaced with a tax on every mile  
>> traveled
>> by each car and truck.
>
> You could double this to 36 cents a mile and people wouldn't really 
> notice it much at the pumps.  Gas has already jumped something like 80 
> cents/gallon so what is another 18?  Unfortunately it would still be 
> far short of the $1/gallon of hidden costs.  At an extra 18 cents/gal 
> you would have money left over to help get people out of their cars 
> and onto mass transit.  At $1/gal you could apply funds to help cover 
> medical expenses, etc. caused by the pollution.