06/01/2019 at 5:28 pm #176730048
“National Academies Report Demands $70 Billion In Highway Tolls, Taxes” was the subject of NMA E-Newsletter #521. You can find it here:
The report referenced was done by The National Academies of Sciences, Engineering and Medicine.
While the report suggests the use of both the fuel tax and tolls to produce the needed $70 billion, the key take-away is this:
“The study explained the same reconstruction costs could paid with an increase in the current federal gas tax from 18.4 cents per gallon to 30 cents per gallon over ten years.”
That’s really all we need to know. Increasing the fuel tax by a bit over a penny ($0.01) per gallon, per year, is all that’s needed.
It goes on to say:
“”A major advantage of the fuel tax is its very low administrative cost for collecting revenue — most estimates indicate collection costs are less than one percent of total revenues,” the report explained. “Fuel taxes generally encourage efficient behavior insofar as the taxes paid are generally proportional to system use.”
“Even for the toll roads that have extensive electronic tolling, Kirk reports that collection costs consume 8 to 13 percent of gross revenue.”
“TheNewspaper calculated that the best-managed toll roads in the country had overhead costs of 23 percent (view figures). The National Academies study also noted that the cost of adding toll collection equipment to every existing interstate highway would be $55.5 billion.”
It’s not clear whether the toll revenue lost to inefficiency is typically 8% to 13% or 23%, but in either case the loss is *much* greater than the <1% with the fuel tax. Needless to say, any revenue lost to ‘overhead’ is that much additional we would have to pay in tolls — not to mention the $55B(!) just for toll collection equipment.
With most issues, there are at least two sides, two or more valid viewpoints. In this case there really is only one rational conclusion as to how we should raise the money needed for construction, maintenance, and repair of our highways, bridges, and tunnels — and that is, the way we’ve been doing it for decades — the motor fuel tax.
Toll proponents (typically those who profit from their use) will breathlessly exclaim, “B-b-but, what about EVs?! They’re getting a free ride.” Currently, in some cases, they are — but that problem is relatively easy to solve. Electricity is (or can be) metered just like fuel. Many charging stations are currently free, but there is no reason a tax (roughly equivalent to the fuel tax, per mile) cannot be assessed at the charging stations. Same as charging the fuel tax at the pump.
If there are concerns about “cheating” (charging from an un-metered source) EVs could (and probably should) have meters built-in so that the tax can be calculated and paid by the owner.
In short, the existence of EVs is absolutely no reason to abandon the fuel tax. Greedy toll proponents are grasping at straws in a desperate attempt to keep their gravy train rolling along.
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