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To: delapaz; Phantom Lord; Daus; Publius
I have a high suspicion that if you sum up all of the money currently raised by federal state and local gas taxes, add in all of the money raised by car fees, truck fees, licensing, driver's licenses, etc. then take out all of the money spent on roads and highways, that you will have a huge pile of money left over. In other words, roads pay for themselves and are not subsidized by taxpayers.

A simple intellectual exercise.

Gas taxes run about 40 cents per gallon and fleet economy is about 20 mpg, so 2 cents per mile (all those other fees barely pay for the DMV operations they are related to).

A really, really, really busy urban 6 lane highway might get 180,000 cars per day per mile (maximum capacity is about 2500 cars per lane per hour - one car every 1.5 seconds).

180,000 cars/mile * 2 cents/mile * 365 days = $1,314,000 annual gas tax revenue per mile.

On the other hand, the cost of building an urban freeway is easily $100 million per mile (Boston's Central Artery is costing over $1 billion per mile), to say nothing of maintenance and police costs, lost property tax revenue, 4-5% interest costs on bonded indebtedness to finance construction, etc.

Rural interstates are cheaper, but also have much less traffic to generate revenue. It is clear that a "profit and loss" statement on almost ALL highways would show an operating ratio of close to 10 (that is, gas tax revenue is 1/10th of costs).

The interstate system is not supported by self generated gas taxes, but by gas taxes from mileage driven on local roads, which in turn are paid for from the property tax rolls. In addition, most states take large sums of money from General Funds (Income and Sales taxes mostly) to augment their gas tax money. For example, Virginia gets up around 50% of its state highway funding from the sales tax, I believe.

To put it more succinctly, my gas taxes from driving on local roads to the supermarket supports your use of interstates for commuting, since I commute on the train and mostly use the PA and NJ turnpikes for my intercity trips.

A typical drive from New York to Florida would be subsidized to the tune of $200 each way by property taxes and sales and income taxes. The typical 15 miles each way on the expressway commuter is getting a subsidy of well over $1500 per year from property taxes.

A typical single complex interchange project between two or more expressways is providing an annual subsidy $150-$300 per year for each driver using it daily.

A typical large "free" interstate bridge carrying 200,000 vehicles per day, like the Woodrow Wilson over the Potomac on the Beltway (its replacement is expected to cost $1 billion, with another $1.75 billion for its approaches), represents a "gift" to daily users of roughly $1750 per year over and above gas taxes derived from use.

Clearly, drivers are subsidized by thousands of dollars per year. Imagine the gas tax going to $4 per gallon, or having to pay $0.15 per mile tolls and $4 fees for each major bridge crossing, and you can imagine a world where automobiles actually support themselves.

On the other hand, Amtrak makes about 75% of its costs, and has been steadily closing that gap despite being starved for capital, and thus prevented from starting more variable profit routes to cover its large fixed cost overhead.

Rail sure seems like a better mode financially to me as a taxpayer, seeing as most trains make money on direct operations costs (though the system isn't large enough anymore to cover fixed costs).

233 posted on 01/04/2002 6:50:37 AM PST by Andrew Byler
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To: Andrew Byler
Using the Boston Artery as an example to compare costs is not representative of the average cost. Bostons costs are way above anybody elses when it comes to building roads or transportation of any kind.

When someone wants to build a tunnel should we use the Big Dig as the baseline for doing a cost/benefit analysis?

236 posted on 01/04/2002 8:33:03 AM PST by Phantom Lord
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