New 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 Capitol Hill 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 today 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).

Today’s 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.

  • Biker

    Interesting analysis — I don’t see this trend reversing itself anytime soon.

  • Great job highlighting this myth. I have heard the argument time and time again. Can’t seem to get people to see roads as a subsidized transit model.

  • Oh, and we added this story to our national page. Hope it helps spread the truth!

    Sid Burgess
    National Director
    NewsFifty

  • I would like to note that this is only for ‘highway’ funding. Local roads, I believe, are completely subsidized by non-users.

    What this naturally does is encourage wasteful driving over alternatives such as public transit and shipping goods by rail

  • Thomas

    Unfortunately for the rail-heads, the only graph that is worse than this is the amount of non-user funding for light rail. Everyone travels on a road, so the fact that everyone pays is not that enlightening. Not everyone travels by rail, but believe me everyone pays for rail.

  • What happened in 1977-81 that was then corrected to have the drop in user contribution and the rise in non-user?

  • Great work as usual, Elana. However, we should not be so sanguine in accepting the “user fee” framing, because it is spurious. The federal gas tax is paid by anyone who buys fuel, whether they ever use a federal-aid road or not. The person who makes long commutes via toll-free interstates is heavily subsidized by others who may primarily use local roads. None of this is to argue against the motor fuel tax, it is to say that the only true “user fees” in transportation are fares or tolls that are collected for a specific facility or mode. And even then, it is the rare case indeed when true user fees cover the full cost. If we are ever to make progress on developing a complete (and clean) transport system, we have to get over the idea that “user fees” are the only appropriate way to pay for it.

  • hhoran

    The Pew Subsidyscope piece, as presented, is useful, but very incomplete and misleading. (a) there is a huge mismatch between the users paying gas taxes (the dominant “user fee”) and the roads being built with those taxes (predominately major federal and state highways). The users of interstates and expressways aren’t paying even the 70% share suggested here–there’s a big financial transfer from drivers paying taxes on fuel burned on cheap local roads to drivers using major highways (b) there is an even larger mismatch between the cost of expressways in big metropolitan areas and major highways crossing rural America, yet these are lumped together in the 70% number. If you could magically track gas tax payments by drivers on Interstates crossing Nebraska you’d see a big surplus (revenue much greater than road construction and maintenance costs) whereas you’s see a huge deficit on all urban highways, and a humongous deficit if you include related land use and parking costs, and the true economic costs of the land used for the highway.
    Most urban expressways probably get bigger “non-user” subsidies than the big city rapid transit systems. Highway methodologies count fuel taxes from those Nebraska truckers and suburban parents dropping their kids at school as “user fees” for Interstate 95.

  • Junkmail

    If you live in the middle of the city and only use public transportation, you use and help to deteriorate the roads as much as much as a rural commuter that does not have access to public transportation. There can be no question that an 80,000 pound semi transporting your food, clothing, appliances and more causes more damage than hundreds of thousands of commuter miles of a fuel efficient car.

ALSO ON STREETSBLOG

Actually, Highway Builders, Roads Don’t Pay For Themselves

By Tanya Snyder |
You’ve heard it a thousand times from the highway lobby: Roads pay for themselves through “user fees” — a.k.a. gas taxes and tolls — whereas transit is a drain on the taxpayer. They use this argument to push for new roads, instead of transit, as fiscally prudent investments. The myth of the self-financed road meets […]

Six Lies the GOP Is Telling About the House Transportation Bill

By Ben Fried and Ben Goldman |
The transportation-plus-drilling bill that John Boehner and company are trying to ram through the House is an attack on transit riders, pedestrians, cyclists, city dwellers, and every American who can’t afford to drive everywhere. Under this bill, all the dedicated federal funding streams for transit, biking, and walking would disappear, leading to widespread service cuts […]

Fred Barnes: Americans Mainly Want to Stay in Their Cars

By Ben Fried |
After yesterday’s electoral drubbing, the Obama administration will have to deal with a starkly different Congress when they make their expected push for a multi-year transportation bill early next year. We know that some influential House Republicans, like John Mica, don’t necessarily believe that bigger highways will solve America’s transportation problems. And we know that […]

Study: Most Roads Don’t Pay for Themselves

By Angie Schmitt |
Most American roads — even the most highly trafficked — are financial losers. That’s a major finding from a new study by the Center for American Progress [PDF]. A financial analysis by the think tank found that about four out of 10 U.S. highways don’t carry enough traffic to generate sufficient revenue to pay for their maintenance […]

Transit’s Not Bleeding the Taxpayer Dry — Roads Are

By Tanya Snyder |
We’ve said it before and we’ll say it again: Roads don’t pay for themselves. But maybe they should. “Taxpayers cover costs that should be borne by road users,” asserts the State Smart Transportation Initiative at the University of Wisconsin-Madison. “Road subsidies push up tax rates, squeeze government services, and skew the market for transportation.” SSTI, […]

A Few Words on Transportation User Fees

By Ryan Avent |
We tend to have a few good laughs when Randal O’Toole fires up his Cato computer and weighs in on transportation issues. It’s hard to take seriously a man who thinks that having the government tax people to build something which it then gives away for free is the libertarian ideal. Do federal gas taxes […]