Cross-posted from City Observatory
During National Infrastructure Week earlier this month, we again endured what has become a common refrain of woe about crumbling bridges, structurally deficient roads, and a lack of federal funding for infrastructure. This call for alarm was quickly followed by yet another Congressional band-aid for the nearly bankrupt highway trust fund — and this one will hold for just sixty days.
It’s clear that our transportation finance system is broken. To make up the deficit, politicians frequently call for increased user fees — through increased taxes on gasoline, vehicle miles traveled, or even bikes. All the while, one of the biggest users of the transportation network — the trucking industry — has been rolling down the highway fueled by billions in federal subsidies.
A new report from the Congressional Budget Office estimates that truck freight causes more than $58 to $129 billion annually in damages and social costs in the form of wear and tear on the roads, crashes, congestion and pollution — an amount well above and beyond what trucking companies currently pay in taxes.
CBO doesn’t report that headline number, instead computing that the external social costs of truck freight on a “cents per ton mile basis” range between 2.62 and 5.86 cents per ton mile. For the average heavy truck, they estimate that the cost works out to about 21 to 46 cents per mile travelled.
That might not sound like a lot, but the nation’s 10.6 million trucks travel generate an estimated 2.2 trillion ton miles of travel per year. When you multiply the per ton mile cost of 2.52 to 5.86 cents per mile times 2.2 trillion ton-miles, you get an annual cost of between $57 and $128 billion per year.
Unfortunately, trucking companies don’t pay these costs. They are passed along to the rest of us in the form of damaged roads, crash costs, increased congestion and air pollution. Because they don’t pay the costs of these negative externalities, the firms that send goods by truck don’t have to consider them when deciding how and where to ship goods. This translates into a huge subsidy for the trucking industry of between 21 and 46 cents per mile.