Tuesday, January 04, 2011

"The process by which the gas tax is allocated is corrupt and lacks transparency."

Myth Busted: Road Costs Not Covered by Gas Taxes

For the full report click here: Do Roads pay For Themselves?


Texas Public Interest Research Group
Copyright 2010

Austin, TX – A new report released today by the Texas Public Interest Research Group disproves the common misconception that road-building is paid for by user fees, showing that gas taxes cover barely half the costs of building and maintaining roads, a fraction which is likely to fall steadily.

Among the findings of the report:

  • Federal gasoline taxes were originally intended for debt relief, not roads.
  • Highways, roads and streets have received more than $600 billion in subsidies over the last 63 years in excess of the amount raised through gasoline taxes.
  • The amount of money a particular driver pays in gasoline taxes bears little relationship to his or her use of roads funded by gas taxes. Drivers pay gasoline taxes for the miles they drive on local streets and roads, even though those proceeds are typically used to pay for state and federal highways.
  • Most state gas taxes are partly offset by subsidies that exempt gasoline from sales taxes.

"Texas needs to make difficult choices about how to fund our states' troubled transportation system. The first task is to discard common myths about how roads are paid for," said Slatter at TexPIRG.
The transportation finance system in Texas is broken. Officials at the Texas Department of Transportation (TxDOT) have admitted there isn't enough money for basic road repairs. The process by which the gas tax is allocated is corrupt and lacks transparency.
"The state’s gas tax has been placed in a cookie jar and lawmakers help themselves to as many as it takes to pretend they’ve balanced the budget," said Slatter. "The process discourages transparency or accountability."
"This dishonest charade only encourages state officials to seek indirect and short-sighted methods to fund road projects," Slatter continued. "In Texas, that means pushing the same unpopular private toll road agenda the state has been pushing for close to a decade."

While toll roads are the closest thing to a user fee, in Texas, the state has turned to privatizing toll roads in order to fund most major highway projects. Privatization deals are fraught with problems and characterized by the same leveraging of debt, reckless shifting of risk and conflicts of interest that caused the financial meltdown on Wall Street.

"Looking ahead to the 2011 legislative session, Texas lawmakers will be faced with serious challenges to fund smart transportation projects," concluded Slatter. "This report shows that highway spending has been wrongly portrayed as financially conservative. Sound transportation policy requires honest investment in transportation infrastructure that advances long-term needs, rather than continuing on the wrong path towards more debt and waste."

For More Information:
Melissa Cubria
Emily Slatter
(512) 610-0083

© Texas PIRG: www.texpirg.org

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