UPDATED: Drivers Cover Just 51 Percent of U.S. Road Spending

There’s a persistent misconception in American culture that transit is a big drain on public coffers while roads conveniently and totally pay for themselves through the magic of gas taxes. And that used to be true — at least for interstate highways, a fraction of the total road network.

Drivers directly pay for just 50.7 percent of the cost of the American road system. Image: ##http://en.wikipedia.org/wiki/File:Hampton_Roads_Bridge_Tunnel.jpg##Wikipedia##

But that was many, many failed attempts to raise the gas tax ago. A new report from the Tax Foundation shows 50.7 percent of America’s road spending comes from gas taxes, tolls, and other fees levied on drivers. The other 49.3 percent? Well, that comes from general tax dollars, just like education and health care. The way we spend on roads has nothing to do with the free market, or even how much people use roads.

“Nationwide in 2010, state and local governments raised $37 billion in motor fuel taxes and $12 billion in tolls and non-fuel taxes, but spent $155 billion on highways,” writes the Tax Foundation’s Joseph Henchman. Another $28 billion of that $155 billion comes from revenue from the federal gas tax.

Meanwhile, transit fares cover 21 percent of costs nationwide, indicating that the difference in subsidies for roads and transit is not as great as it’s often made out to be. (Though in absolute terms, there is a big difference: The total subsidy for roads dwarfs the total subsidy for transit.)

Even more interesting is to compare roads to Amtrak, a favorite target of self-styled fiscal conservatives in Congress. Amtrak recovers about 85 percent of its operating costs from tickets — a relative bargain compared to other modes. Even accounting for capital costs, Amtrak — which operates mostly on privately owned tracks — covers 69 percent of its total costs through ticket prices and other fees to users.

The Tax Foundation also analyzed transportation spending in every state to determine which states subsidize their road systems the most through general taxes. Drivers in Delaware, Florida, New Jersey, North Carolina, and New York cover the highest share of road spending compared to drivers in other states. Drivers in Wyoming, Alaska, South Dakota, and Vermont cover the lowest share.

Correction: An earlier version of this story, using Tax Foundation calculations that don’t factor in the federal gas tax, understated the share of road spending covered by drivers. Also, updated 1/24/13 to reflect total Amtrak costs.

  • Nathanael

    Amy: your country roads are *heavily* subsidized by city dwellers.  Now, part of that is to get food to the city, which is cool.  But since you aren’t a farmer… you’re freeloading on the road budget. 

    Now, that’s OK *as long as you are willing to pay for public transportation for other people*.  But if you start saying, “Why should I pay for public transportation when I don’t use it?” the response will always be “Why should we pay for your extra use and damage of the rural roads?”

  • Amy misses the main point – that “DEDICATED” taxes, fees, tolls directly coming from motor vehicle ownership and use are covering only about half the direct costs of maintaining our system of public roads, streets and highways.

    Drivers have been CLAIMING for decades “That they pay their own way.” for THEIR roads, and therefor cyclists, pedestrians and transit are mooching off THEIR money.  Drivers claim that if all the dedicated gas taxes and tolls went into road construction and maintenance, there would more than enough to build the interstates AND fix that pothole in front of your house.

    Unfortunately, that CLAIM has been a fantasy, if not an outright lie perpetrated to confuse everyone.

    Federal Highway has been producing an annual booklet that totals all the “direct” costs of  building and maintaining the road system, and totaling all the revenue sources, from dedicated motor fees, but also from the general revenue taxes – income, sales and real estate taxes.  The FHWA report concluded that only some 60-65% of roadway costs were covered by vehicle user fees.  This is higher than the Tax Foundation number, but still far under break-even.  The unmet difference is made up from our property, sales and income taxes, taxes we all pay regardless of whether own a car or how much we drive it.  Cyclists and pedestrians and transit riders all pay these local non-vehicle taxes to keep the roads maintained.

    Broken down by category of road, the interstate and express highways get larger shares of user fees, but an interstate is useless if the roads leading from your house are so terrible that you can’t drive safely.  The roadways are a system that to work all the way through, so trying to pidgin hole fund sources and uses is self defeating – there is a cost to keeping the whole system running, which has to match the funds supplied.

    Several people have noted that highway system costs have focused on the direct civil construction and maintenance costs, including signals; and sometimes the law enforcement costs.  However, much has been left out of the equation.  The opportunity costs of all the parking spaces needed – constructing and maintaining the lots and on-street spaces, the land cost and impact of broad swaths of land that sits vacant waiting for parking.  Your car gets a larger space to park than you get for an office.  Think about it.
    Medical costs of crashes and damage don’t show up.  The illness from air pollution, building damage from pollution.  The personal time lost to congestion, the extra costs of deliveries due to congestion. 

    Much of these external costs are caused by our mono-modal focus on forcing the private motor vehicle as the solution for every possible transportation need.  Trying to force in the last possible car, to try to make cars move faster and faster even on local streets, has succeeded in forcing walking and cycling off the streets, and driving transit to near extinction. 

    Another false assumption is that we can build our way out of congestion.  Just another few billion dollars for more roads will have us all moving to the 1939 Worlds Fair GM exhibit world of tomorrow.  That was a simulation and will always be a fairy tale.  That exhibit never accounted for all the parking spaces at each end of the trip, much less provided for the real capacity needed to move all the people who wanted to travel.

    The point is that drivers don’t pay their own way, at least via the dedicated taxes they think cover the highway system, and that they are subsidized by all the rest of us, not the other way around.

    One is not impressed by the results of this Big Lie, only by it’s perverted success in distorting the public discourse for decades.  Time for some truthiness here  😉

    And Amy, Leeds is interesting, but very flawed.  It’s ratings focuse, like many architects, on just the building in front of them, and not on the neighborhood or overall system it should be fitting into.  A building can get a Platinum Leeds rating without seriously considering the energy used by transport access to and from the building.  Leeds gives a few extra points for providing some bike parking and changing rooms, but there are no points removed if the building is impossible to bike or walk to.  There are no points removed for transit in-accessibility.  Leeds assumes that access will be primarily by private car, now and forever. 
    Not impressed.

  • I don’t think this is very relevant to the national debate over transit funding. Roads, as a class of spending, don’t pay their way because most roads are small and funded out of local taxes. I have seldom heard about local transit advocates fighting for local road funds.
    In the wake of the ISTEA, the debate is over federal highway funds, which are funded through the federal gas tax, and the question is whether federal gas tax revenue should be shifted into transit projects. I believe that the Interstate system largely pays for its upkeep and expansion–not withstanding the original spending to create the system in the 40s/50s.The problem with our transit funding system is that money is spent locally but granted federally, and grants support capital but not operating costs. National grants temper localities’ incentive for cost-effectiveness. Meanwhile, the capital subsidy bias makes cities fund capital-intensive projects like light-rail and metro in cases where buses could provide more accessibility–although they are not as cool.

  • @facebook-649368383:disqus  I like your comment – can you refer me to some references to cite for that data? I’d love to write a blog post about it. 

  • Anonymous

    The link is wrong. That’s just states. This one includes federal gas taxes, and has the 50.7 figure:

    http://taxfoundation.org/blog/road-spending-state-funded-user-taxes-and-fees-including-federal-gas-tax-revenues

  • thamason paine

    the drivers cover just 51 percent of us which you have mentioned in your aritcles is interesting and good to read this. mr bean games

  • Tao Liu

    The Highway Trust Fund has been in the red since the 50s. The Federal government has to transfer several billion dollars every year from the General Fund to keep the Fund solvent.

    The Interstate is not a ‘Federal System’, it’s not managed by the Federal Government. The Interstate is owned by the states, and federal funding goes through each states DOT to get to the Interstate. States have to cover whatever Congress doesn’t give them. As for capital costs, the trust fund’s not enough to cover maitnenance. Capital Costs pretty much all come from general funds.

    Federal funds for transit goes through a much higher amount of scrutiny compared to highway construction. The USDOT takes a look at the system and the projected ridership and costs to determine whether or not to provide the funding. Not enough ridership would result in funding rejection. Bus lines may be more flexible than rail systems, but they add to road congestion on top of lacking the capacity and reliability of rail. A good transit system is one where buses feed into the rail system to take riders somewhere farther off. Of course, the ridership has to be there to justify the rail system.

  • Me

    Please post the link to this booklet. Thanks a lot!!

  • Brownstone2

    Just don’t preclude the option to drop your kids off at school. I dropped my son at day care for 3 years by riding a mile, then 4 miles to work every day. Part of this was adequate streets to ride on, and part was a deliberate decision to buy a house well within bicycle and transit distance from likey work locations. Nobody says YOU have to commute by bike, but conversely, you should not be saying that no-one else can ride because you don’t want to.
    And LEED is not all that it’s cracked up to be. A building can get Platinum LEED Certification and yet not have functional bicycle parking or viable bicycle, pedestrian or transit access. Like most architect sponsored awards, the focus is only on the building, and ignores the surrounding context the building sits in. The same building with only auto access uses far more energy than if the building were sited near transit, with safe sidewalks, within a bicycle friendly road and street system. LEED is incomplete.

  • Brownstone2

    I have been picking up the booklets at the annual TRB (Transportation Research Board) Annual Meetings in Wash DC each January. Sorry, but I haven’t been using a web link. Try searching Federal Highway under DOT.gov and look in FHWA’s library area.

  • Me

    Oh. I see. Do you know the title by any chance. I’m sure I can find it online if they printed it. Thanks a lot for your reply.

  • Me

    If the grocery distributor pays gas taxes to truck food into cities, the cost of the road is eventually included in the cost of groceries. It works out. Plus, it is unrealistic for the country to fail to provide a consistent source of funding for transportation. Eventually we will have to pay to fix infrastructure or else we will give up the infrastructure when it becomes unusable. Why not just plan ahead more carefully and set aside a pool of money?

  • Scott Wendt

    Well, your statements about highway pork are right on, but your painting of city transit planners as more fiscally responsible and transit projects getting greater federal scrutiny is father from the mark.

    There are enough transit projects around the country that failed to meet their initial rosy ridership projections to prove that true federal scrutiny is seriously lacking. In fact, I can’t find one case where any LRT, BRT or other rail project not opposed by the local community didn’t receive funding because low ridership projections. In fact, its almost always a case where projects are halted by local or community public opposition after already securing federal funding.

  • Tao Liu

    You’re going to have to start listing examples of ‘lousy ridership’ otherwise I can’t rebuff.

    Most failed LRT systems are poorly planned systems from decades ago when the USDOT was flush with cash and public was hyping for rapid rail systems. The result is the approval for poorly planned systems. Not to mention, many of these systems are located in low-density cities where ridership doesn’t justify heavy rail (LA Metro). Today the USDOT has much less funds and transit projects have to meet much higher standards and competition.

    There has been MANY rail projects rejected funding by the USDOT. DC Metro spent decades trying to push their new Silver Line for funding, and didn’t succeed until 2004 (previous proposals were rejected).

  • Guest

    Let’s compare what the farmer gets for his tax dollar to what a city dweller gets for theirs! Often the only reason country roads get improved is because fast driving city folks don’t like driving behind tractors!

    BTW, your claim of damage to rural roads by farmers shows your ignorance of farm equipment and rural life in general. If a combine or 8-wheeled tractor can drive across a soft field without sinking in, how much pressure do you think it’s putting on a highway? The one study used over and over again showed damage to a road that had only 3.5 inches of asphalt or only half as thick as neighborhood streets. Major city streets are usually 3 to 4 times that! The real damage to most rural highways come from trucks with high axle loads hauling goods from one city to the next! Rural farmers don’t buy enough of anything to require the massive fleets of these overweight semi-trucks filling rural highways. Furthermore, rural drivers don’t own enough cars to require the massive rural freeways sprawling across their farm fields. Name any rural interstate project in the country and I will show you the farmers who organized against it and the urban developers and neighboring city dwellers who demanded it.

    Look at the pictures and see who is really getting their money’s worth? Just so you know, the cost of adding the Capital Seal and decorative railing and concrete on that Madison freeway overpass could have paid to completely replace the restricted 3-ton bridge in rural Manitowoc county. That is why the farmers complain!

  • Scott Wendt

    Let’s compare what the farmer gets for his tax dollar to what a city dweller gets for theirs! Often the only reason country roads get improved is because fast driving city folks don’t like driving behind tractors!

    Look at the pictures and see who is really getting their money’s worth?
    Just so you know, the cost of adding the Capital Seal and decorative
    railing and concrete on that Madison freeway overpass could have paid to
    completely replace the restricted 3-ton bridge in rural Manitowoc
    county. That is why the farmers complain!

    BTW, your claim of damage to rural roads by farmers shows your ignorance of farm equipment and rural life in general. If an 8-wheeled tractor can drive across a soft field without sinking in, how much pressure do you think it’s putting on a highway? The one MnDOT study used over and over again across the country showed damage to a test road that had only 3.5 inches of asphalt. Typical residental streets in cities are 2 times that thickness and major city streets are usually 3 to 4 times that and often made of concrete. The real damage to most rural highways come from trucks with high axle loads hauling goods from one city to the next. Rural farmers don’t buy enough of anything to require the massive fleets of these overweight semi-trucks filling rural highways. Furthermore, rural drivers don’t own enough cars to require the massive rural freeways sprawling across their farm fields. Name any rural interstate project in the country and I will show you the farmers who organized against it and the urban developers and neighboring city dwellers who demanded it.

  • Bolwerk

    Places with public transportation pay taxes, and they get back less than they send to Washington. You effectively do not pay a cent for public transportation unless you live in a place that has it. No need to worry!

  • Otto Khera

    No cars? That’s your fiction.

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  • bill

    You forgot diesel tax. I spent over 5k personally for one truck which I own. And another $550 for highway usage tax. There areover 5 million commercial vehicles. That’s over $30 billion just from trucks.

  • The report considered “fuel taxes, tolls, and other user taxes and fees” which includes diesel taxes. The report also used data from the Census Bureau which also combines gas & diesel taxes into the “motor fuel tax” heading.

  • decentdad

    How much of the money spent on roads, actually goes to the roads? Not just a sweetheart deal for contractors to pave 20 miles of road, with 20 mexicans and 2 white guys, for $40 million? Much of the overspending comes from what I like to call “welfare for road workers”. This happens all over the country.

    When I lived in New York the bridge projects were endless. IE: the Tap-N-Zee bridge project was going on for my entire 5 years of residence. They might still be going? The local tv news did an undercover piece on the project. It was blizzarding but 30 guys were still there just walking around. They showed one guy doing an oil change on his vehicle. Two others sitting in the supply box playing cards. One guy sleeping in his car. Numerous people just walking back and forth along the project. They did this all day long. The union salary for the average road construction worker $35 per hour. The goal for these guys is to drag the projects out as long as they can. Shutting down lanes cost’s the taxpayers for that bridge, $100,000 per hour.

    The entire government wastes more money than we will ever know. They spend billions on court cases hiring lawyers, against people that can barely afford lawyers. Ironically the people forced to fight in court pay taxes and still have to pay for lawyers to defend themselves, against the very people that are supposed to be working them.

    I wish we could just start over with our government.

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  • Mark

    These facts are a bit off, the US uses 134.51 billion gallons of gas a year, not including diesel, the federal tax per gallon is 38 cents, for a total of $51.12 Billion collected from gas only taxes, compared to the stated $28 billion in this article. In California there is another 32 cents per gallon plus 6% + local %’s which can make the total up to 10% per dollar spent (. So, I question the validity of this article!

  • SRR126

    What is the tax rate on car purchases, on repairs and maintenance, on licensing. What is the tax rate on 15.6 million cars in 2013?
    Of course none of these taxes are explainable by driving automobiles – roll-eyes

  • BKExcuse

    The federal gas tax is 18 cents. Perhaps you should do some actual reasarch before trying to discredit the article.

    http://www.eia.gov/tools/faqs/faq.cfm?id=10&t=10

  • politicaljoe

    I see … private companies rip off the government. In such a case the government that is evil one – not the private company. That logic shows how way off our thinking is on how GREAT profit making companies are FOR us and how BAD government is AGAINST us. Even through the government is made of of those we elect and those appointed by those we elect, they are bad – really? If they are that bad then shame on us and you for letting our government get into that shape. Shame on us for not having an eye enough on the government contracts or requiring government regulation that mandates such oversight. Tight regulation and watch dogging over the private companies WOULD have made it impossible for that to happen. But I’d say the ones downing the government would be the first to say regulation is bad.

    So the solution is to deregulate everything, say the companies will “do the right thing” .. then when we get ripped off, the “adept” government is the problem. Underfunded government and a lack of anyone actually looking or caring is the problem. People just watch cable news and all in unison start pointing at the government as the root of all evil.

    It is sad to see so many people just “ate up” in the head with the fact that “we the people, by the people, for the people” is bad and “those for the stockholders and only the stockholders (by law)” is good for America. WAKE UP! We need a good combination of both, not one that over powers the other, either way. Right now, thanks to this exact mentality, the super powerful are playing the American population for fools, ripping our government from the ability to provide education, infrastructure and security to our population through constant bad media by those that want to keep starving the beast.

    This is my government too, I vote, care and have seen what good government can do. Those of you that don’t like the government should stop voting for candidates that tell you how bad government is. When you vote in candidates that run on “the government is bad”, then you get what you voted for.

    Don’t just mindlessly fight against the only thing we have as a country – our ability to elect those that will do good for us. There is NOTHING stopping us from doing this – except public perception paid for by those that want you to think that is not he case .. and it is working. 🙁

    Be part of the solution , not part of the problem.

  • decentdad

    Corporatism is what we have, so lobbyist’s pay for political campaigns and the perpetual cycle of corporate control is the norm.
    My solution is term limits, ban lobbyist’s, force all politicians to use the same pool of money from one campaign fund limited to a certain amount. Stop printing fake currency. Push the dollar back on the gold standard. Cut all unnecessary spending out, no more military spending for at least 5 years.

  • Ian Turner

    I guess you’re looking for a more comprehensive look at government money flows to and from drivers? Here is one:

    http://ti.org/delucchiinpress.pdf

    “The analysis indicates that in the US current tax and fee payments to the government by motor-vehicle users fall short of government expenditures related to motor-vehicle use by approximately 20–70 cents per gallon of all motor fuel.”

    That analysis is from 2006; since then things have gotten worse, as gas taxes have diminished due to inflation and improved fuel economy.

  • Jonathan N

    I know this is an old post but it still shows up when this subject is searched. I think it is important to point out that taxes to infrastructure spending ratios are a bit misleading because current spending is unsustainable. It is insufficient to cover maintenance and our roads and bridges are slowly eroding away. I’d love to see what the % would be if it factored in true costs including those that are being deferred and thus conveniently let out of the figures.

  • Will Sandberg

    The total cost of driving is about 60 cents per mile, or $1.8 trillion per year. The subsidy in road spending claimed here is about $70 billion a year, or 4 percent, which can (and should) be eliminated by raising vehicle, gasoline, or diesel taxes. The subsidy to Amtrak is 31 percent, the subsidy to mass transit is 79 percent, which should (but can’t) be eliminated by raising fares — passengers would stop riding if they had to pay their own way.

  • lorian

    hii

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