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Who should pay for roads, transit projects?

House Republican leaders were hit with a busload of criticism this winter when they announced a proposal to end a long-held practice of funding public transit projects using a portion of federal gas tax revenue.

“The transit community, who has no source of revenue, is demanding that they stay and get a share of the trust fund, which … they don’t contribute to,” said John Mica, a Florida Republican who chairs the House transportation committee.

The bill has been retracted, for the moment, anyway, because of widespread and bipartisan opposition. But the proposal revealed a common bias that comes up in transportation funding debates, say transit advocates.

The implication was that drivers pay their own way, while transit riders depend on subsidies, says Phineas Baxandall, a senior policy analyst at the U.S. PIRG Education Fund who co-authored a report last year called “Do Roads Pay For Themselves?

In reality, gasoline taxes and other motorist fees don’t come close to paying for the full cost of building and maintaining the nation’s roads, streets and highways — not to mention covering the health and environmental costs associated with driving.

“The House bill seems to be justified by some of the myths that this report meant to expose,” Baxandall said.

Neither transit users nor drivers directly pay for the full cost of their transportation. State and federal subsidies help keep bus and train fares more affordable, while property taxes pay for building and maintaining a majority of the nation’s roads.

The U.S. PIRG report concludes that “user fee” revenues fall $600 billion short of what’s actually been spent on roads, street and highway construction nationally since 1947.

It’s true that local property taxes, not gas taxes, pay for building and maintaining most roads, says David Levinson, an associate professor of civil engineering at the University of Minnesota, but whether or not that’s a subsidy for drivers is debatable.

“There isn’t a person in the United States who doesn’t get some use out of the roads,” says Levinson, who also writes the Transportationist blog. Even people who don’t drive still benefit from things like fire protection, ambulance services, and mail delivery — all of which depend on roads. “I suppose you could be Ted Kaczynski, but even he had to use the U.S. Postal Service to mail his bombs.”

But if property tax revenue isn’t a subsidy, it’s not a user fee either. Unlike gasoline taxes, property taxes aren’t affected by how much a person actually uses the road – a household with multiple cars driving hundreds of miles per day pays the same tax rate as a household where no one drives at all.

Paying for roads based on property rather than fuel consumption isn’t optimal, says Levinson, but it’s not completely irrational. Imagine what would happen to your home’s property value, he argues, if the street in front of it suddenly disappeared.

The current transportation bill debate is partially over the federal Highway Trust Fund, which Congress created in 1956 to pay for construction of the interstate highway system. A portion of the fund, which comes from a two-cent gas tax, was shifted to transit projects in the 1970s as interstate construction began to wind down.

In recent decades, the fund has been used to fund a wide variety of transportation projects, from bridges to bike lanes. The fund is also shrinking as Americans drive less and buy more fuel-efficient vehicles. A report in January from the Congressional Budget Office said the fund could face insolvency in 2013.

The Republican transportation bill unveiled by Rep. Mica that month proposed moving public transit projects out of that fund and paying for them through other sources. The move was viewed by some as an attempt to put transit on a “starvation diet.” Opponents, including many urban Republicans, spoke out and the bill was eventually retracted.

Congress must pass a transportation bill by March 31 to avoid a partial government shutdown. Republicans have yet to reveal a bill to replace the rejected one, and political observers now expect the House to pass a two or three month extension of the current policy before seeking a longer term bill later this year.

The Senate has passed a transportation bill that basically maintains the status quo, says Baxandall. It doesn’t threaten transit funding in the way the House bill did, but it also doesn’t reflect what he sees as long-term shift that’s underway, with the number of miles driven by Americans beginning to recede.

“That should also be a source of deep soul searching about the investments we’re going to be making that will last for a generation,” says Baxandall, “but instead we’re pretty much muddling forward with the same dysfunctional system.”

Photo by Michael Hicks via Creative Commons

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