Comments on: Think Roads Pay for Themselves? Think Again

By: John M

John M — Mon, 30 Nov 2009 00:50:04 +0000

‘User funds v. non-user funds’ is not the same as ‘user v. non-user’ We all know it is the (unfortunate) case that many/most of our income and property taxpayers are motorists. They pay taxes to funds not derived from road use, but they are not universally non-users.

I’m saying this not to argue against the article, but rather for the article. Our arguments against the transportation status quo need to be rock solid. While turning ‘non-user funds’ into ‘funding by non-users’ sounds stronger, it unfortunately doesn’t stand up.

By: Richard Risemberg

Richard Risemberg — Fri, 27 Nov 2009 05:34:10 +0000

Please note, all, that this appears to refer to federal highways, which have always been LESS subsidized than state and municipal roadways. For an example of the far higher subsidies for state and local roads, see this study from Texas DOT:

http://www.txdot.gov/KeepTexasMovingNewsletter/11202006.html#Cost

By: PCC

PCC — Wed, 25 Nov 2009 17:56:30 +0000

Some states front their local match of federal funds by issuing bonds backed not by road revenues, but by other taxes. Here in Illinois, liquor taxes have helped fund the two most recent rounds of state infrastructure bonds.

By: Phineas Baxandall

Phineas Baxandall — Wed, 25 Nov 2009 14:48:54 +0000

This trend has likely accelerated in the last year or so, at least at the federal level. Since the gas-tax fed Highway Trust Fund went into the red in late 2008 Congress has made up the difference with general funds, paid for mainly with income taxes.

By: Tom

Tom — Wed, 25 Nov 2009 03:23:27 +0000

Charles: the original numbers come from DOT, so no, there’s no larger report that can be pointed to. This is just some crunching of relatively obscure numbers that are already collected by the feds. Interesting, though!

By: Galls

Galls — Wed, 25 Nov 2009 03:13:09 +0000

No one is even mentioning a tax on every gallon of gasoline goes to the interstates, but not even half of all gallons of gasoline are used on the actual interstates.

So interstates in reality pay for less than 1/4th of their costs.

By: Charles Komanoff

Charles Komanoff — Wed, 25 Nov 2009 02:48:46 +0000

Elena –

I believe the Subsidyscope study encompasses all U.S. roads — federal, state and local. (You appear to characterize it as federal only, in para #2.)

I couldn’t follow your prose in your comment (#4). Could you restate?

I followed the link to what appears to be a 1-2 page summary. Is there a detailed, underlying study?

Thanks.

By: David

David — Tue, 24 Nov 2009 21:16:35 +0000

Rob’s point does need to be clarified. Bonds financed through tolls on specific roads are probably the fairest and most practical way to charge users of specific roads. Indeed, that system is much fairer in a lot of ways than a broad stroke gas tax.

By: Elana Schor

Elana Schor — Tue, 24 Nov 2009 21:16:33 +0000

Ian beat me to it. Also, it’s worth noting that toll increases localities may need to make higher debt service payments on bonds in the out-years often require political support to pass – which isn’t guaranteed.

By: Ian Turner

Ian Turner — Tue, 24 Nov 2009 20:30:35 +0000

Rob, the point is that if tolls don’t bring in as much as expected, then the governments must pay the bonds out of general revenues, i.e. from non-users.

By: Ian Turner

Ian Turner — Tue, 24 Nov 2009 20:29:41 +0000

Bonds should be entered as non-users, because they will be paid by future taxpayers, who are decidedly not users of today’s roads.

By: Rob

Rob — Tue, 24 Nov 2009 20:16:04 +0000

“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.”

Not sure I understand this last paragraph. If a state issues a revenue-bond for a toll road, then the tolls are supposed to pay interest and principal on those bonds. So how would non-users being paying for the bonds?

Can someone please explain? Thanks.