Transportation funding follies

We’ve long known that there are big problems with the way we pay for transportation projects. Our infrastructure continues to crumble, but our current system seems to offer the worst of most worlds. The user pays principle that seems so sensible when we buy other things is rarely used to buy transportation. Politicians and urban planners are so very anxious to get us out of our cars, yet transportation policy subsidizes car use. Developers and businesses absorb the cost of “free” parking, and motorists don’t pay the full cost of what they use. This article (free registration required) explains the situation with a focus on Minnesota: We tend to assume that driving pays entirely for itself, and that that’s reason enough for government to favor roads over other transportation choices. Not only do drivers pay for their cars, we believe, but also for gasoline that is taxed enough to cover the construction and maintenance of all the roads we’ll ever need. But this is a myth. Minnesota’s 20-cent gasoline tax would have to rise by 39 cents to cover all of the state’s current road-related expenses. To start building the roads we actually need in order to deal with congestion, the tax would have to rise 42 cents beyond that, pushing the price of gasoline beyond $2.60 a gallon. Clearly, somebody besides the driver is paying for Minnesota’s roads. Drivers — through gasoline taxes, car registration fees and sales taxes on vehicles — actually pay only 62 percent of the costs of roads. General taxpayers “subsidize” the rest, no matter how much or little they drive. Transportation money that comes from the feds is subject to all sorts of political wrangling. Donor states complain that they don’t get back what they pay in and “donee” states counter that they need the extra money. High growth states like California, Arizona, and Texas get back less than they put into the federal transportation pot, and now cities are getting less funds from states. And often the money that is supposed to go toward transportation gets diverted elsewhere. Transportation funds are famous for morphing into general-purpose slush funds. Even good news can turn bad. The downside of increased fuel efficiency is that decreased gas tax revenues have warmed some politicians to the idea of increasing gas taxes. Then there’s the problem of transportation projects that have real-world price tags but only hypothetical funding sources. Take Seattle’s monorail project, for instance: With questions surrounding the monorail authority’s finances, Seattle City Council members yesterday pledged not to let the project begin construction without “substantial evidence” the entire 14-mile line would be completed. The move came after the Seattle Monorail Project acknowledged its sole source of money — the 1.4 percent Motor Vehicle Excise Tax increase approved by Seattle voters in November — is taking in less than expected.