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With the nation’s primary federal transportation funding source set to expire this month and a number of state level funding proposals failing to pass before the state legislature adjourned, a new report from the CoPIRG Foundation and Frontier Group breaks the myth around who actually pays for roads in Colorado.
The new report, “Who Pays for Roads?” finds that drivers currently pay less than half the total cost of roads and the average household pays $597 a year over and above any gas taxes or other fees they pay when they drive. The CoPIRG Foundation argues that if Colorado is going to identify funding to meet the future transportation demands of one of the fastest growing states in the country, we need to close the gap between how Coloradans think we pay for transportation – through gas taxes and other fees – and how we actually do.
“There’s a misperception that the gas taxes and car fees we pay cover the costs of the road system in Colorado,” said Danny Katz, Director of the CoPIRG Foundation. “But that’s a myth. The road system is subsidized by every one of us. So-called ‘user fees’ pay for just under 50% of our road system. If Colorado fails to recognize this, then we won’t be able to come up with the innovative transportation funding solutions we need to meet the demands of Colorado’s growing population and economy.”
In the report, the CoPIRG Foundation highlights that so-called “user fees” like gas taxes and vehicle registration fees cover less and less of our transportation costs each year. This trend is set to continue with stagnating driving, increasing fuel efficiency of cars and a gasoline tax that has lost purchasing power as a result of inflation. Both the federal and Colorado’s gasoline tax has remained the same for over two decades.
The new report comes as the nation’s federal transportation act is set to expire and the nation’s primary source of transportation funding, the federal Highway Trust Fund, is set to become insolvent. Nationally, the combined revenues from gas taxes and other user fees will not meet current spending levels. The federal government will be faced with a $16 billion shortfall.
“Congress needs to take action by May 31st. But as they take action, they need to acknowledge that road user fees come nowhere close to covering the current system,” Katz said. “Building and maintaining a 21st century transportation system requires bold rethinking in how we raise and spend transportation dollars.”
The new report pulls back the veil on the “users pay” myth, finding that:
- Gas taxes and other fees paid by drivers now cover less than half of road construction and maintenance costs nationally – down from more than 70 percent in the 1960s – with the balance coming chiefly from income, sales and property taxes and other levies on general taxpayers.
- General taxpayers at all levels of government now subsidize highway construction and maintenance to the tune of $69 billion per year.
- Regardless of how much they drive, the average American household pays $597 to road construction and repair – over and above any gas taxes or other fees they pay that are connected with driving.
“The ‘users pay’ myth is deeply ingrained in U.S. transportation policy, shaping how billions of dollars in transportation funds are raised and spent each year,” said Tony Dutzik, co-author of the report and Senior Analyst at Frontier Group, a non-profit think tank. “More and more, though, all of us are bearing the cost of transportation in our tax bills, regardless of how much we drive.”
The report highlights that decision makers need to move beyond the user fee myth because increasingly Americans are not “drivers” and “non-drivers” and our funding and spending should reflect that. People are using a variety of modes of transportation with nearly two-thirds of American drivers reporting that they also use transit, bike or walk over the course of the week. As Coloradans increasingly embrace a multi-modal lifestyle, transportation funding and policy choices should be more holistic, based on what delivers the best benefit to the public regardless of mode.
Ordinary Americans agree. For example, nearly two-thirds of Americans believe it is appropriate to use gasoline tax revenue to support public transportation, according to a national study released recently researchers at the Norman Mineta Transportation Institute. Other recent opinion polls suggest that Americans believe that the nation should give greater priority to transit, bicycling and walking in transportation spending.
The report highlights that while $69 billion of non-user fee money is spent by the government on highways, only $46 billion is spent on transit, passenger rail, bicycling and pedestrian programs combined.
“Roads don’t pay for themselves – we’re all paying for them regardless of how much we drive,” said Katz. “Recognizing this should give us the freedom to look at our transportation funding and spending the way people use our transportation system – multi-modal. We’re not a state of drivers and non-drivers. People want to get from A to B efficiently, safely and affordably and will use a variety of modes to do that. Our funding should support the best infrastructure and services that allows us to do that regardless of whether that funding comes from a gas tax or a sales tax.”
The report can be found here.
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