Who Pays for Highways?

To reiterate something I said yesterday, the idea that road spending is entirely paid for by the gasoline tax is simply mistaken. Public sector budgets are complicated things, especially in situations like America's road network where a large variety of agencies are involved, so sometimes different studies get different results but under no circumstances is it the case that the gas tax covers everything. Here, via Aaron Naparstek is a study from UC Davis' Institute for Transportation Studies. The abstract:

I make a comprehensive analysis of all possible expenditures and payments, and then compare them according to three of the four ways of counting expenditures and payments. 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. (Note that in this accounting we include only government expenditures; we do not include any "external" costs of motor-vehicle use.) The extent to which one counts indirect government expenditures related to motor-vehicle use is a key factor in the comparison.

And, look, that's fine. There's no particular reason why the fiscal cost of infrastructure investment should be entirely borne by user fees. But critics of transit systems are forever moaning that these systems require subsidies to stay viable. As indeed they do. But so does the highway network. The issue isn't whether to subsidize, it's what to subsidize and to what extent.

Photo by Flickr user bike used under a Creative Commons license

Comments

Well, yes there is a reason to have user fees cover the cost of infrastructure, plus externalities, and why it would be a good policy to increase gasoline and other user taxes to fully cover such costs; people would then reveal how much they actually valued driving their cars. Of course, adopting the same stance with regards to other modes of transport would also give us insight as to relative preferences. I suspect Matthew fears that his prefrence for train travel isn't as strongly held by most other people, thus he would oppose car users and train users each paying fees which reflected full internal and external costs. In other words, Matthew like trains best when he can force people who don't like trains as much to pay for Matthew's train ride.

Posted by Will Allen | July 22, 2008 3:57 PM

It is also worth noting that road maintenance costs in general go up and down with the price of crude because asphalt is a petroleum product. Asphalt prices are directly tied to oil prices. California paid $110-$128/ ton in 2001-2002. This month the cost per ton of asphalt is $716.p/ton. Thus, as asphalt prices go up, so must subsidies for happy motoring. Certain personages that troll around here will cite and cite and cite and cite per-passenger-mile subsidy figures from 2001 like they was spoken by the Lord in them red letters. Its important to understand the magnitude of change here.

Posted by RoboticGhost | July 22, 2008 4:06 PM

First, fuck the 101.

I suspect Matthew fears that his prefrence for train travel isn't as strongly held by most other people, thus he would oppose car users and train users each paying fees which reflected full internal and external costs.

If we simulatenously increased gas prices and transit fares, how would anyone get anywhere?

Posted by scythia | July 22, 2008 4:15 PM

How does this tie in to federal allocation of highway funds to states with a drinking age of 21? Would states with a drinking age of 18 not have to pay gas taxes?

Posted by Robert | July 22, 2008 4:25 PM

I suspect Matthew fears that his prefrence for train travel isn't as strongly held by most other people, thus he would oppose car users and train users each paying fees which reflected full internal and external costs. In other words, Matthew like trains best when he can force people who don't like trains as much to pay for Matthew's train ride.

Tu quoque. But not surprising from a Bush-supporting, security-state libertarian.

Posted by SavageView | July 22, 2008 4:29 PM

scythia, I suspect people would have to decide if they really wanted to pay for the transportation they were using, and they would for that transportation they really wanted, and wouldn't for the other transportation. An earth-shattering concept, I know.

Savage, I don't think you understand the term you employed.

Posted by Will Allen | July 22, 2008 4:40 PM

I think Yglesias is just looking to retire off the Mixner/Transit debate.

Posted by Jeffrey Davis | July 22, 2008 4:43 PM

Will, your support for budget busting military adventurism and your faux-libertarianism are well known. Sure, you aren't really a libertarian - no libertarian would actually defend the re-instatement of the Khmer Rouge, but then your thing is really "greatest deaths for the greatest number" - which more fully explains your support for restoring brutal murderers and your support for the thuggish invasion of Iraq than "libertarian" ever could.

But your ability to read minds is almost as good as your ability to read - what would that be? I'm pretty sure the board would agree that it rates about on par with a mentally defective four-year-old.

Posted by Not As Stupid As Will Allen | July 22, 2008 4:50 PM

kind of bogus that you link to a study that you can't download. especially when you quote the abstract in its entirety. consider this a request: can you please post actual, working links that prove the point that government does, in fact, massively subsidize car travel?

Posted by brevity | July 22, 2008 4:51 PM

Meathead, you really can't post without lying, can you? I've supported high enough gas taxes to cover the full cost of military involvement in the Persian Gulf for years (while Democrats lament high gas prices as a means to win elections, of course) , so you are lying about my support for budget busting. I never defended anything about the reinstatement of the Khmer Rouge, so that is another lie.

You are also always consistent in your support of slavery and racism, of course. You still mourn Jesse Helms' passing, don't you?

Posted by Will Allen | July 22, 2008 4:58 PM

Matthew writes,

But critics of transit systems are forever moaning that these systems require subsidies to stay viable. As indeed they do. But so does the highway network. The issue isn't whether to subsidize, it's what to subsidize and to what extent.

Sorry, but you still haven't produced anything remotely resembling a serious argument for the HUGE disparity in transit subsidies vs. highway subsidies. Substituting the subsidy estimate from the study you cite above for the BTS estimate reduces this vast disparity by only a tiny amount.

The BTS estimate of highway subsidies is about $5 per thousand passenger-miles. We can calculate the corresponding figure from the numbers in your study as follows: using a shortfall figure of 50 cents a gallon (roughly the midpoint of the 20-70 cents range you quote), and an average private motor vehicle fuel efficiency of 20 mpg, we get a subsidy of about $25 per thousand vehicle-miles (1000/20 * $0.5), or about $15 per thousand passenger-miles (using an average vehicle occupancy of about 1.6).

So using your study, rather than the BTS figures, the disparity in highway subsidies vs. transit subsidies is about $390 per thousand passenger-miles ($405 - $15), rather than about $400 per thousand passenger-miles ($405 - $5).

Now explain to me why transit should receive a public subsidy that is $390 per thousand passenger-miles larger than the highway subsidy.

A serious answer, please, not a handwave. The answer needs to be based on a quantitative analysis of the net externality costs of highways vs. transit. Not guesses and wishful thinking.

Maybe transit really does save something like $390 in negative externality costs per thousand passenger-miles compared to highways. But you need to support that claim with evidence, not just assert it.

Posted by Mixner | July 22, 2008 5:12 PM

Privatize the Interstate Highway System.

Make it all toll (user fee)-based.

That's how it is in a lot of countries.

The tolls will be very high (reflecting the true cost of upkeep on the roads, plus profit), and more people will look to subsidized mass transit.

Take the up-front payment from the Interstate Highway System and spend it on massive mass transit expansion and upgrades.

The Republicans should love this idea. The free market at work!

Posted by jerry 101 | July 22, 2008 5:15 PM

Mixner raises a good point. How are the "transit subsidies" broken out? I know that Amtrak is hugely subsidized, but that most of its subsidy effectively goes to areas outside the NE corridor.

Personally, if road use were properly priced, I think that transit should be forced to at least break even. There are a lot of cost savings to be had, but no political will.

Posted by SJE | July 22, 2008 5:35 PM

Mixner raises a good point. How are the "transit subsidies" broken out? I know that Amtrak is hugely subsidized, but that most of its subsidy effectively goes to areas outside the NE corridor.

Personally, if road use were properly priced, I think that transit should be forced to at least break even. There are a lot of cost savings to be had, but no political will.

Posted by SJE | July 22, 2008 5:35 PM

Privatize the Interstate Highway System.

The problem here is pretty obvious: it is going to hit hardest the people who can least afford it, at least in many places. Here in DC, in order to find affordable housing, many people have fled to the far reaches - I've known people to commute from West Virginia (yes, really), but even "nearer" suburbs like Germantown or Middleburg are reasonably common.

So, in addition to gas prices going up, let's throw some pretty hefty toll increases at them too! Oh, and let's hope they aren't already having trouble with a house payment or anything, but if they are, the market will help us sort them out, at virtually no cost to the rest of us, I am sure.

Maybe a Republican can love this idea, but no liberal person should get behind it.

Posted by Brad L | July 22, 2008 5:35 PM

Mixner - have you stopped to consider that automobiles are insanely expensive to operate for people of modest to lower means?

Take away transit and you leave the poor with very limited transportation options. You may not care about this, but it would also cripple businesses & industry while precipitating creative urban housing situations - ones that you can find in many 3rd world countries.

Posted by BFR | July 22, 2008 5:37 PM

Mixner raises a good point. How are the "transit subsidies" broken out? I know that Amtrak is hugely subsidized, but that most of its subsidy effectively goes to areas outside the NE corridor.

Personally, if road use were properly priced, I think that transit should be forced to at least break even. There are a lot of cost savings to be had, but no political will.

Posted by SJE | July 22, 2008 5:38 PM

This knowledge that highways are subsidized is so powerful, and the data to make the argument had to be out there for years. So, how is it that Democratic politicians haven't ensured that this is COMMON knowledge? It's really shocking.

Posted by ferd | July 22, 2008 5:44 PM

So, how is it that Democratic politicians haven't ensured that this is COMMON knowledge?

Probably because transportation isn't entirely a left v. right debate. Rural progressives are likely to have a different view on transportation priorities than urban progressives (and the same can be said - to an extent - with conservatives).

Also, it's important to realize that highways with SOV oriented transportation has been cost effective for about the last 50 years or so. There haven't been very many voices agitating for better public transit & rail until recently.

Posted by BFR | July 22, 2008 5:52 PM

I'd love to see a statement, total government subsidies are X per passenger mile for driving and Y per passenger mile for public transportation.

I've never seen that though, except the BLS numbers.

If the BLS numbers total local state and federal expenditures on roads, I consider that a reasonable estimate of the total government outlay. By now, the country has reached the point where there will not be a sudden ballooning of maintenance expenses and the country is big enough that the amount of new construction is by now close enough to constant across time that what the government spends is about what the government spends.

If government spending shot up because of higher oil prices, still I'd like to see numbers.

Without numbers, it cannot be said confidently that driving subsidies are as much or more than public transporation subsidies. - Which is interesting because the conventional wisdom is that the US prediliction for driving was artificially created by the US government. Maybe it was not.

I'd favor figuring out what the actual subsidies are, and then evening them out, even if that means less subsidies for public transportation.

I also take $2 per gallon as a reasonable estimate of the externalities of driving. There are much bigger externalities in New York, much smaller in Montana, but nationwide, $2 per gallon sounds about right. That turns out to be not that much and I think it is reasonable to subsidize public transportation up to the point that a $2 per gallon externality is taken into account.

Posted by Arnold Evans | July 22, 2008 5:57 PM

Isn't that the bit of road where David Halberstam got killed?

Posted by Gene O'Grady | July 22, 2008 6:04 PM

Re: Well, yes there is a reason to have user fees cover the cost of infrastructure, plus externalities, and why it would be a good policy to increase gasoline and other user taxes to fully cover such costs; people would then reveal how much they actually valued driving their cars.

Why give people who don't buy gas a free ride? As I mentioned in another post back a ways, every last human being in this country, from babes at breast to the moribund at hospice, use the highways even if they don't drive on them, since they benefit (and in no small way) from goods and services transported on them-- and may occasionally be passengers in other vehicles on them too. Shouldn't they have to pay as well? And isn't the best mechanism for that a progressive tax? And by the way whatever happened to the concept of "progressive taxation" among progressives? If I didn't know better I'd think Matt and half his posters here had been communing with Grover Norquist! Come on, "user fee" is rightwing doublespeak for "regressive tax".

Re: Privatize the Interstate Highway System.

So after we've already paid for those highways we turn them over to assorted political donors so they can make a quick buck. Nice. "Privatize" is a euphemism for "give the store away to crony capitalists."

Posted by JonF | July 22, 2008 6:15 PM

The whole transportation debate is framed in stupid wonkish terms. Eisenhower had it right, you use national security to justify transportation infrastructure spending. Resilient infrastructure (in a disaster or an attack) is diverse. Our infrastructure is not diverse. That means more rail, more marine transport, more zeppelins, more jet packs, more unicycles, more of every mode but the goddamn car, which is already absolutely everywhere. Then you backdoor your economic and enviromental policy on the national security justification. That's how Ike did it and it's the only way to get it done.

Posted by joejoejoe | July 22, 2008 6:18 PM

Eisenhower had it right, you use national security to justify transportation infrastructure spending.

That's probably true, but you could also build it on economics too. You need for people to get to work in order to have a functioning economy. Gas and roads are getting expensive but we still need people to go to factories and offices, so let's build more rail, ferries, etc, etc.

Posted by BFR | July 22, 2008 6:25 PM

That's how Ike did it and it's the only way to get it done.

Remember the National Defense Rail Act Fritz Hollings trotted out in late 2002/ early 2003? In a nutshell, it was a $4.6 billion dollar a year 2004-2008 expenditure to create "a world-class national rail system." He framed the bill, just as joejoejoe 'splained it out. In the still-recent heat of 9/11 there was a mild bipartisan rally behind the bill. George Will wrote some favorable things and Senator McCain jumped up to salute.

Then Fritz retired, nobody jumped in, and it went to place where errant bills and socks go. It is a ripe time for some martial Democrat to try this strategy again. Not in the least part, because it's true. What if Phoenix had 24 hours to evacuate? There's, like, 2 roads in and out of there or something. Everybody hop on Cindy's plane! Anyways, the association between sound infrastructure and national defense seems like a valid argument we should be hearing a lot more of than we do.

Posted by RoboticGhost | July 22, 2008 6:43 PM

I think a better analogy for train subsidies is air travel which is massively subsidized through airport construction and corporate bailouts. Also aren't the rail companies supposed to be paying for passenger rail? I think that was part of the deal when they were given huge tracts of land in the west.

Posted by ligedog | July 22, 2008 7:35 PM

Jon F, people who don't buy fuel, but who do buy goods and services from people who do buy fuel pay fuel taxes indirectly. You have noticed that as the price of oil goes up the price of other goods and services goes up? Works the same way with fuel taxes.

Just as every last person benefits from a good road system, every last person benefits from a good transit system, even if they never use it.

Posted by Adirondacker | July 22, 2008 7:39 PM

joejoejoe,

Resilient infrastructure (in a disaster or an attack) is diverse. Our infrastructure is not diverse. That means more rail, more marine transport, more zeppelins, more jet packs, more unicycles, more of every mode but the goddamn car, which is already absolutely everywhere.

I just love these constantly-shifting rationalizations for more public transportation. So now it's national security/disaster protection, is it?

No doubt, you have a serious analysis showing that spending an extra dollar on transit would buy more protection than spending it on highways, right?

What's that? You have nothing in the way of serious, empirical analysis and are just guessing? Color me unsurprised.

Posted by Mixner | July 22, 2008 7:44 PM

Let's extrapolate this user fee thing of Mr. Allen's. Personally, I am not against user fees, as long as the algorithm is applied evenly.

For example, the US military budget in 2006 exceeded 50% of gloabl military expenditures. There is simply NO WAY that such expenditures can be tied to simple defense --which possibly should be supported out of the general budget.

For sake of debate, suppose we agree that only 1/4 of total global military expenditures can actually be for defense (this would mean that --maybe --the next 4-5 nations combined spent as much as we do.)

So, obviously, the other 25% of expenditures HAVE to be for somebody's specific benefit. My guess -- the multinationals. It creates a nice operating climate for them.

So --Will --in the interest of consistency, are you willing to level user fees on multinationals to cover 1/2 of the defense budget?

This discussion, of course, leaves aside other inconsistencies in your thinking --such as "network effect" benefits from wider dispersion of transportation infrastructure to commerce in general, or its benefits to national defense.

Your memory may not be long enough to contain the fact that the Interstate Highway system was originally expanded under Eisenhower for commerce and defense.

Posted by Tim Connor | July 22, 2008 7:45 PM

What if Phoenix had 24 hours to evacuate? There's, like, 2 roads in and out of there or something.

A recent study ranked 132 American cities according to vulnerability to terrorist attacks. Boise was the only city in the western half of the country to make the top 10. The most vulnerable cities are mostly in the east, including, not surprisingly, New York and Washington D.C.

Low-density cities without much mass transit are much less attractive targets because it's much harder to kill or injure lots of people when they are dispersed over a wide area. Phoenix doesn't seem very vulnerable to natural disasters, either. It's not in an earthquake, tornado, hurricane or flood zone. Its worst natural problem is probably summertime heat. Maybe if the power went out for a week in August and all those air conditioners stopped working.....

Posted by Mixner | July 22, 2008 8:00 PM

Also, high-density cities have more tiger attacks, shark attacks, missing white women, scary black men, urban snipers, stovepipers, windshield wipers, muggers, buggerers, bushwhackers, hornswogglers, horse thieves, bull dykes, train robbers, bank robbers, ass-kickers, shit-kickers and Methodists.

So there.

Posted by Muxmer | July 22, 2008 8:13 PM

Phoenix has had flood problems. In fact, in 1980, many of the auto bridges washed out and so people were shuttled across the river on -- guess what -- higher efficiency trains.

Posted by jacobus | July 22, 2008 8:21 PM

Mixner - Debates about transportation always devolve into some asshole arguing that the dirty losers that sit next to him on the subway have cooties and that the liberal hippies are trying to take away their truck and replace it with a wheatgrass powered Cushman. Or said asshole cherry picks a bunch of data from the BTS data and then misrepresents it to show that light rail causes more pollution than passenger cars.

Which is precisely why I'm switching to the Eisenhower method. Apparently I still have to demonstrate with "empirical evidence" that diverse redundant capabilities are beneficial to national defense (which is why we don't have 4 Armys or 4 Navys or 4 Air Forces or 4 Marines but one of each) but EVEN THEN I have to spell out that spending more on one aspect of transportion (highway spending) does not produce diversity and redundancy in the overall transportation system but (suprise!) just produces more of the same single mode.

For more on diversity and resilience in the national infrastructure read Stephen Flynn's 'The Edge of Disaster: Rebuilding a Resilient Nation' or a quick summary of his ideas at the link below.

http://pubs.asce.org/magazines/ascenews/2008/Issue_01-08/article2.htm

Posted by joejoejoe | July 22, 2008 8:22 PM

joejoejoe,

Mixner - Debates about transportation always devolve into some asshole arguing that the dirty losers that sit next to him on the subway have cooties and that the liberal hippies are trying to take away their truck and replace it with a wheatgrass powered Cushman. Or said asshole cherry picks a bunch of data from the BTS data and then misrepresents it to show that light rail causes more pollution than passenger cars.

Debates about transportation always devolve into some asshole, often with a name beginning with "j", who obviously doesn't have a clue what he's talking about, making things up out of thin air and then throwing a hissy fit when he's challenged to provide evidence to support his fabrications.

For more on diversity and resilience in the national infrastructure read Stephen Flynn's 'The Edge of Disaster: Rebuilding a Resilient Nation' or a quick summary of his ideas at the link below.
http://pubs.asce.org/magazines/ascenews/2008/Issue_01-08/article2.htm

Er, the article you link to doesn't mention "diversity" at all, let alone diversity of transportation modes. It's about the importance of infrastructure resilience. You do understand that "resilience" doesn't mean "diversity," don't you?

In fact, the one example of non-resilient infrastructure it mentions is a highway bridge. I agree with you that we should be spending more money to improve the resilience of our highway infrastructure.

Posted by Mixner | July 22, 2008 8:39 PM

Jon F., it is bit embarassing that Adirondacker needed to explain that even people who don't have cars pay gas taxes when they purchase, say, a head of lettuce. Sheesh.

Tim Fowler, my guess is that at least 25% of the Defense budget exists because such a large percentage of the world's oil reserves are in the Persian Gulf, an I'd fully support raising gas taxes at least enough to cover that amount. Yes, many other nations free ride, gaining the benefit of secured oil extraction form the region while the U.S. taxpayer foots the bill, but the U.S. taxpayer would likely be worse off if he/she tried to solve that problem.

Posted by Will Allen | July 22, 2008 8:59 PM

I'm outing Mixner everybody. He's the one in the blue shirt in front.

Posted by joejoejoe | July 22, 2008 8:59 PM

Debates about transportation always devolve into some asshole, often with a name beginning with "M", who obviously doesn't have a clue what he's talking about, making things up out of thin air and then throwing a hissy fit when he's challenged to provide evidence to support his fabrications.

Posted by Muxmer | July 22, 2008 9:03 PM

"Privatize the Interstate Highway System.
Make it all toll (user fee)-based.
That's how it is in a lot of countries.
The tolls will be very high (reflecting the true cost of upkeep on the roads, plus profit), and more people will look to subsidized mass transit.
"

Two different issues are being conflated
+ users paying for what they use and
+ privatization

There is NO obvious reason why the first should lead to the second. The history of privatization of these sorts of natural monopolies does not give one much confidence --- the general pattern is to run what one has been given into the ground by delaying repairs for as long as possible, siphon off whatever money one can into executive compensation, and then rely on a state bailout when it all falls apart --- vide the British experience with privatized rail.

On the other hand there seems no reason why the costs to users of using roads should not reflect reality. This could be done through a variety of mechanisms, from higher gas taxes, to substantially increase tariffs on trucks, to toll roads. Presumably in an ideal world we'd have unbiased experts weighing up the various costs of maintaining the system (from those that have no connection with usage rates like highway signs, to those that are extremely correlated with certain types of usage, like heavy trucks causing damage) and we'd try to allocate the usage fees so as best to match those costs.

And as for this hurting the poor, well duh. A rise in the costs of anything hurts the poor. But that's got nothing to do with the issue at hand --- if we went by that logic, every fscking thing, from the cost of gasoline to the cost of healthcare, would be free. If we want to help the poor, we work on ways to boost their income, we don't maintain a badly incentivized transportation system whose net result will be to leave everyone worse off.

Posted by Maynard Handley | July 22, 2008 9:10 PM

I'm outing joejoejoe.

Posted by Mixner | July 22, 2008 9:11 PM

By the way, if gas taxes were raised enough to cover the externalities of foreign oil extraction, I suspect the rate of technology innovation in regards to vehicles which used very little, if any, petroleum would accelerate greatly. At some point it would become necessary to tax cars at a much, much, higher rate, in order to make up for much lower gasoline tax revenues.

Posted by Will Allen | July 22, 2008 9:15 PM

Matt-

The "gas tax fund" has paid Columbus OH over $1 million so we could have numerous "Federal studies" supporting Mayor Mike's(Coleman) "light rail feasibility".

Meanwhile, the strongest argument seems to be that the "Downtown hipsters" will choose to ride a "train" after 20+ yrs of completely ignoring a bus system that averages 17 buses/hr over the entire proposed route for the 'train'... and not to mention losing an entire "auto lane" in each direction- even at 3:00 AM.

Posted by fletch | July 22, 2008 9:20 PM

That's a good one Mixner but even allowing for the burning paper head I still consume fewer BTUs riding a train then non-burning flesh heads use driving a passenger car.

Posted by joejoejoe | July 22, 2008 9:21 PM

Wow, Will Allen who spent days here defending Jesse Helms from those mean old liberals who were pointing out his racism accuses someone else of mourning the passage of that nasty ass racist. But then you can't really expect much from a guy who defends Reagan's idiotic support for the architects of Cambodia's killing fields. Ooh, it was "anti-communist." Then too, the guy who thought that there weren't enough Iraqis being killed under Saddam Hussein and so supported a program leading to hundreds of thousands of dead doesn't really have much in the morals department.

Posted by Not as stupid as Will Allen | July 22, 2008 9:21 PM

If more people used trains their subsidy would be lower. Amtrak is expensive because it requires rail maintenance for lines where you have one train per day.

And both kinds of transportation are complementary. People using trains are less people using highways. Having good transit(Both buses and trains) means more highway capacity for things where you really needs a highway.

There are several important freight routes that are congested because of commuter traffic. It doesn´t have to be in this way.

Posted by André Kenji | July 22, 2008 9:23 PM

If more people used trains their subsidy would be lower. Amtrak is expensive because it requires rail maintenance for lines where you have one train per day.

And both kinds of transportation are complementary. People using trains are less people using highways. Having good transit(Both buses and trains) means more highway capacity for things where you really needs a highway.

There are several important freight routes that are congested because of commuter traffic. It doesn´t have to be in this way.

Posted by André Kenji | July 22, 2008 9:26 PM

I still consume fewer BTUs riding a train then non-burning flesh heads use driving a passenger car.

Depends on the train and the car.

Posted by Mixner | July 22, 2008 9:27 PM

Meathead, you are lying again. I said Helms' racism was disgusting, and should be fully illuminated. You, on the other hand, agree with Helms' views regarding racial superiority, and how those of races you deem inferior should do your bidding until the end of time.

Posted by Will Allen | July 22, 2008 9:31 PM

If more people used trains their subsidy would be lower.

That doesn't follow at all, even assuming you mean "subsidy per passenger-mile" rather than total subsidy. What specific policies do you propose to increase the use of trains? Barack Obama is proposing to spend $150 billion to accelerate the development and commercialization of more fuel-efficient cars. What do you think that's likely to do to train usage?

And both kinds of transportation are complementary. People using trains are less people using highways. Having good transit(Both buses and trains) means more highway capacity for things where you really needs a highway.

Having transit for which there is little or no demand doesn't make sense. It's a waste of money. Underutilized rail systems are especially wasteful, because they cost so much money to build and operate.

Posted by Mixner | July 22, 2008 9:36 PM

Will's rewriting of history is hilarious. He spent days trying to distract from Helm's racism. What a joke this idiot Will Allen is. And his promotion of those who murder people he thinks are beneath him (Iraqis, Cambodians) so he can "prevent the spread of communism" or "steal their resources" is pretty clear to anyone who can actually read.

Posted by Not as stupid as Will Allen | July 22, 2008 9:36 PM

jerry-

The Republicans should love this idea. The free market at work!

Are you ignorant, or did mommy just drop you on your head?

As a "libertarian", I can't really speak for the Repubs, but your Take the up-front payment from the Interstate Highway System and spend it on massive mass transit expansion and upgrades. idea has already been the SOP for the last 30+ years. (see also "bike trails" and "light-rail transit studies")

And, since you hate "roads" so much, I will eagerly await your decision to never buy any item that ever travelled over any Federally-funded "road" to the store you choose to patronize...

Chickenroadist!

Posted by Better than Ezra | July 22, 2008 9:55 PM

What specific policies do you propose to increase the use of trains?

oh how about $5.00 gas. the current cost of energy has surged transit rides by 5-15% nationwide while significantly dropping the amount of gas sold so much so that the highway trust fund is something like 3 billion light this year and will have to be subsidized. the current cost comparison of mass transit vs. cars is specifically dependent on the costs of energy.

Posted by Patrick | July 22, 2008 10:25 PM

Re: Jon F, people who don't buy fuel, but who do buy goods and services from people who do buy fuel pay fuel taxes indirectly.

True maybe, but isn't it better for those costs to be handled at least partly through
a progressive system of taxatio?. Am I the last liberal left on this blog? The rest of you seem to have become Grover Norquist
"progressives", chanting with old Mel Brooks (as Louis XVI) "F*ck the poor!"
By the way I am not opposed to spending money on alterante transit-- I rode a commuter train when I lived in Florida, and I ride my bike to work most days now. I don't however agree that we need increase the fianncial burden on the middle class or the working poor-- in fact, we need to decrease it, a lot. IMO, our roadways are priced with more or less the right mix. I would however support a gas guzzler tax on vehicles with low mileage, to be used for mass transit. That would have the salutary efect of mainly taxing people who buy asininely over-sized SUVs and the like, and many of them are likely to be fairly well off, so such a tax would have some progressivity built into it.

Re: it is bit embarassing that Adirondacker needed to explain that even people who don't have cars pay gas taxes when they purchase, say, a head of lettuce. Sheesh.

It is a bit embarrasing that bedrock concerns of economic justice are jetisoned without a second thought on a supposedly liberal blog in response to a snobbish and rarified elitism that would shame a Bush. At moments like these I wonder if old Petey really was right about Matt and some of his acolytes.

Posted by JonF | July 22, 2008 10:27 PM

Patrick,

oh how about $5.00 gas.

Raising the gas tax by a dollar a gallon at a time of record-high gas prices? Political suicide. Any other ideas?

Posted by Mixner | July 22, 2008 10:31 PM

True maybe, but isn't it better for those costs to be handled at least partly through
a progressive system of taxatio?. Am I the last liberal left on this blog?

No, I'm with you on this. The answer "Well, everything hurts the poor" isn't particularly compelling. The direct effects of increase in commute costs don't simply hurt the lower middle class (really more than the poor, even) more than the rich as a function of percentage of income (as an increase in the price of milk might), they affect the LMC because those people need to use the roads more for structural reasons - they find more affordable housing by moving farther away.

On top of getting hit hard on the roads, I'd bet they are likely to see a nontrivial drop in their property values, which will feed our current housing crunch -- more foreclosures, more owners upside down, etc etc.

Yet in the name of "fairness," we are going to hear proposals to change the road structures in a way that a) hurts them the most and b) was probably unforeseeable to them when they purchased.

Not that this couldn't be plausibly addressed - some sort of direct relief or even gradually phased out tax credits to certain income brackets. But if this system were to be implemented, my first concern would be managing the shock to this group of people.

Posted by Brad L | July 22, 2008 10:40 PM

Savage, I don't think you understand the term you employed.

I'm sure you do. Idiot.

Posted by SavageView | July 22, 2008 10:54 PM

Derkins on the UC Davis study - "This “analysis” is so sophomoric that it’s funny.

Since 88% of people drive alone or carpool to work - compared to the 4.7% who take mass transit - according to the Census, I wonder why we invest so much money in mass transit? When we consider those numbers it looks like we fund mass transit about twice as much as we should.

Right now about 1% of every federal tax dollar goes to road construction or maintenance. I can’t speak for New York, but in Virginia, roads are getting about 10.5% of state taxes, or $3.81 billion, this year. The projected revenues from transportation taxes and fees – guess who pays those, drivers - are $4.79 billion.

It doesn’t take a math whiz to see that WAY more money gets taken in from cars than is given back to cars. Guess where the rest of that money goes – it builds your metros and bike trails. So try again. No gas tax, no roads and maintenance … or metro, buses, sidewalks, bike lanes, or anything else.
For the federal government, it’s even worse. The government took in $69 billion in excise taxes last year, and they only gave $35.5 billion back to the Federal Highway Administration. Before you say - well there’s more than gas taxes in excise taxes - we use about 140 Billion gallons of gas we are taxed at 18.4 cents per gallon. That’s $25.7 Billion. We also use 40 billion gallons of diesel every year - we get taxed at 24.4 cents per gallon there. That’s another $9.7 Billion. Do the math - that’s $35.4 billion that automobiles bring in before we even start to talk about anything else. When you ride the subway or scoot along down your bike path, you might want to consider that automobiles paid for those, and then some.

This study is bogus. It stacks the deck in favor of transit."

The highway system is 95% built, 5% remaining tied up by environmentalist's lawyers. The Federal tax that was to build highways remains. It is 3X as much as is needed for Operations & Maintenance on roads and bridges, capacity upgrade. The problems have been neglect of critical repairs on key bridges, high density highway - by diversion of Federal highway funds to corrupt politicians pork barrel mass transit and giant boondoggles like the Massachussetts "Big Dig".

Not a question by anyone that knows the budgets and civil engineering outlays - the Federal tax on motorists being more than adequate to make driving on highways self-funding. What is really going on is motorists being milked for inner city projects and seeing bridges they travel on fall from lack of repairs and the quality of highway road drop the closer one gets to cities that miseuse highway funds - thinking it must be spent on anything but Highways.

Posted by chris ford | July 22, 2008 11:18 PM

Since "the idea that road spending is entirely paid for by the gasoline tax is simply mistaken," then why is a gas tax holiday as an economic stimulus such a bad idea?

Posted by S. P. Gass | July 22, 2008 11:52 PM

Meathead, quotation marks should not be employed unless you are quoting someone. Sheesh.

Savage, you really don't know what the term means, do you?

Posted by Will Allen | July 23, 2008 12:37 AM

Our cities will be destroyed by global warming --floods, hurricanes, pollution, if we don't cut back on fossil fuels (cars). It's not a matter of individuals and their taxes.

Posted by harold | July 23, 2008 1:47 AM

"Our cities will be destroyed by global warming --floods, hurricanes, pollution, if we don't cut back on fossil fuels (cars)."

Riiiiiiiight.

Posted by gladys | July 23, 2008 3:00 AM

First, a quick review of the economic justification for subsidies. Subsidies are warranted where there are net positive externalities. That is because if users are required to pay the full costs of producing the relevant good, they may underconsume relatively to the economically optimal level, and some of those positive externalities will be lost, an inefficient outcome. So, it can make sense for the public to provide a subsidy for the production of this good to the extent that subsidy is required to get consumption to the optimal level.

With that understanding in mind, I think it is indeed a bad idea to makes users pay for all modes of transport without subsidies, even if we have priced in all the negative externalities. First, transport as a whole almost surely has net positive externalities, so in that proposed world we would end up underconsuming transportation as a whole. Second, in such a world people's choice of transportation would not reflect the relative positive externalities in any given case, so we would also not be using the most efficient mode of transportation in many cases.

The upshot of all this is that in order to get the economically optimal consumption of modes of transport in each case, in each case we need to price for negative externalities, but also subsidize for positive externalities. Of course if you can figure out the net effect in each case, you can offset. But can't get to the economically optimal result without doing both of these things.

Finally, I would also note that with a proper understanding of externalities and subsidies in mind, it becomes clear that subsidies per passenger mile are not a particularly useful measure. That is because we have no particular reason to assume that positive externalities are directly proportionate to passenger mile in each case.

Take a simple example. Person A and Person B are both commuting to perform the same job. One of the major positive externalities of transportation would just be the economic benefit to the employer of Person A and Person B being able to perform this job. But the employer's benefit doesn't depend in any direct fashion on how far Person A and Person B respectively had to travel to get to their place of employment. So for commutes, something like subsidy per commute, not subsidy per passenger-mile, would make more sense to the extent the purpose of the subsidy was to capture the economic benefit of the commute to the employer.

Posted by DTM | July 23, 2008 8:17 AM

Raising the gas tax by a dollar a gallon at a time of record-high gas prices? Political suicide. Any other ideas?

nice job avoiding the point. i said nothing about a gas tax, the current gas prices have already surged transit ridership to record levels and depleted the gas tax revenue. you said that transit has little or no demand, that's simply wrong, transit demand (and relative subsidy) is specifically tied to energy prices and you seem to refuse to acknowledge or understand the assumptions behind your arguments because they undercut your conclusions.

Posted by Patrick | July 23, 2008 9:50 AM

As usual, Mixner is totally wrong. The last time I filled up fuel was $4.90 a gallon and for next months budget that's basically $5/gallon fuel. 'Cuz I am not living in my mom's basement and actually have to budget for the real world.

Mixner and Will Allen remind me of Lee campaigning in front of Richmond. It's dazzling, and, being totally impervious to facts, of course they always "win" the argument. Anyone who has "won" an argument with their wife knows just how useful that turns out to be.

But while Lee was sucking up the resources of the Confederacy, the Federals were isolating and strangling the Confederacy in the west and along the coast.

Just as the reality of the Confederacy turned out to be backward agriculture, a ruling class without social redeeming value, and a peasantry kept in ignorance lest they change things, so the reality of Mixner's suburbia turns out to be a mish-mash of unsustainable development, equally lacking in social redeeming value.

Some older folk, plagued by poor breathing and aching joints, go to Mexico, where you can buy steroids over the counter. The relief is nothing short of miraculous- for a while. And then one day they find their bones have become so rotten and porous from steroid use that they simply fail- their ribs collapse, and their fingers break when they try to open a jar.

The interstates and the cheap gas were the the steroids we used to bulk up our economy and lifestyle. Now that history and reality are catching up with us, the American people are looking to change things, and, this being a democracy, they have the right to do that. Even if a few smarty-pants are still out there proving that bumblebees really can't fly.

Posted by serial catowner | July 23, 2008 12:53 PM

serial catowner,

As usual, Mixner is totally wrong. The last time I filled up fuel was $4.90 a gallon and for next months budget that's basically $5/gallon fuel.

Latest weekly retail price of gasoline: $4.064/gallon. Down from $4.114 the week before.

'Cuz I am not living in my mom's basement and actually have to budget for the real world.

Are you sure? Because you don't seem to have a clue about how much things actually cost.

Posted by Mixner | July 23, 2008 2:01 PM

DTM,

Finally, I would also note that with a proper understanding of externalities and subsidies in mind, it becomes clear that subsidies per passenger mile are not a particularly useful measure. That is because we have no particular reason to assume that positive externalities are directly proportionate to passenger mile in each case.

Hilarious. What allegedly superior metric of transportation usage do you propose we should use for the purpose of evaluating the appropriate level of subsidies, and why do you think it's superior to passenger-miles?

Have you managed to produce even a rough analysis yet to justify the vastly disproportionate amount of subsidies currently provided to transit?

But the employer's benefit doesn't depend in any direct fashion on how far Person A and Person B respectively had to travel to get to their place of employment. So for commutes, something like subsidy per commute, not subsidy per passenger-mile,

This argument is nonsense. The cost of transportation increases with the distance travelled. Therefore, the value of the benefit to an employer from his employees' commutes increases with their commuting distance. The more it costs to transport an employee to a worksite, the greater the value of that transportation to the employer.

Posted by Mixner | July 23, 2008 2:36 PM

Patrick,

nice job avoiding the point. i said nothing about a gas tax,

I was being charitable to you, because you seemed to be confused.

I asked: "What specific policies do you propose to increase the use of trains?"

You replied: "oh how about $5.00 gas."

Of course, "$5.00 gas" isn't a policy at all. I assumed, perhaps rashly, that you are not under the impression the government can create "$5.00 gas" by waving a magic wand. The most obvious policy for increasing the price of gas to $5.00 is to increase the gas tax. So I assumed that's what you meant to say. If you had some other policy in mind for achieving this goal, please state it clearly.

Posted by Mixner | July 23, 2008 2:44 PM

gas across the street from me costs $4.60, who needs policy. but again, you refuse to answer the point. you're arguments against mass transit have been twofold, 1) subsidies are higher for mass transit than cars 2) there is no demand for mass transit. now, these points are generally true, when gas is $2.00 a gallon. as fuel costs increase demand for trains skyrockets and thereby reduces the subsidies paid out. it conversely drops highway revenue (via gas tax and tolls), increasing subsidies for cars. you're arguments do not take into account the constraints of the marketplace and as we have left the era of $2.00 gas, are quaint and outdated. the government doesn't need to do anything but recognize the economics of travel in this country have shifted and respond appropriately.

Posted by Patrick | July 23, 2008 7:08 PM

Patrick (or should that be "Patrick"?),

gas across the street from me costs $4.60, who needs policy.

What gas costs you personally is irrelevant. The average price of gas in the United States is slightly more than $4/gallon. To increase that to $5/gallon the government would have to increase the gas tax by almost $1/gallon. As I said, political suicide.

you're arguments against mass transit have been twofold, 1) subsidies are higher for mass transit than cars 2) there is no demand for mass transit. now, these points are generally true, when gas is $2.00 a gallon. as fuel costs increase demand for trains skyrockets and thereby reduces the subsidies paid out.

More nonsense. First, there has been only a TINY shift in overall demand from cars to mass transit. The vast, vast majority of commutes and other trips within metropolitan areas are still made by cars and trucks.

And second, the increased demand for transit, and the increased cost of transit vehicle fuel, has increased the need for subsidies to keep the services running without increasing ticket prices. And cash-strapped local governments are unwilling or unable to increase subsidies. That is why transit authorities are cutting services and increasing ticket prices. The New York MTA just announced its plans to increase ticket prices for the second year in a row. That has only happened once before in the 100-year history of the New York transit system.

Posted by Mixner | July 23, 2008 7:38 PM