Wednesday, February 5, 2020

How Much Do We Pay for Roads and Other Utilities?

Robert Poole of the Reason Foundation presented a comparison below in which I added my data from Honolulu, Hawaii. Thanks to the 12 solar panels on the roof of my house, and my moderate annual mileage (about 11,000 miles at 20 mpg), my costs are similar or better than average US costs.

However, the data below do not include vehicle registration fees which are part of the road charges we pay. My vehicle's registration is just under $30 per month but most light duty trucks pay about $500 for registration on Oahu, which is over $40 per month. Even with registration included, the conclusion is the same. Roads are a vital infrastructure utility and we pay less for them than we pay for other infrastructure utilities.

=========== Poole's article:What Americans Pay in Highway User Taxes  ===========

HNTB Corporation last month put out a useful analysis that compares what Americans pay for roads and highways (via gasoline taxes) with what they pay for other basic infrastructure, such as electricity, water, cell phones, broadband, etc. I was not surprised to see that their results showed a far lower annual cost to use roadways (excluding tolled facilities) than for other user-charge-funded infrastructure. But I was surprised by how low the reported gas tax charge was.

In my book, Rethinking America’s Highways (University of Chicago Press, 2018), I presented a similar comparison, using data mostly from 2012-2013. My results were very similar to HNTB’s, except for the highway number. The comparative monthly figures are shown above.

My numbers make the same basic point—that people don’t realize how little they pay for roads compared with other basic infrastructure. But my fuel tax figure is about double that of HNTB. The answer appears to be that all HNTB’s figures are per household, except for fuel tax, which is per driver. By contrast, all of mine, including fuel tax, are calculated on a per-household basis.

I’m grateful to HNTB for making this kind of comparison, but we should not be presenting an unfairly low figure for what households pay for roads. The main point is to get people to understand that even $46 per household per month is far below what they pay for other basic infrastructure and is not sufficient to cover the capital and operating costs of our extensive roadway network.