The Dernogalizer

December 19, 2008

Federal and State Transportation Funds Need New Source

put it to rest!

put it to rest!

One of the reasons why transportation projects are being heavily slashed all over the place is because because the government raises these funds from the gas tax.  During the summer when gas prices rose very high, people cut back heavily on their driving, which caused tax revenues for the state and federal transportation funds to decline.  Then, when we had our ongoing economic crisis in the fall, people cut back on driving even more.  This led to an even sharper drop in revenues.  What we have going on around the country is extreme cuts in transportation with whole projects and fund allocations being slashed.   Not only are states facing the pinch, but the Feds had to pump an emergency 9 billion dollars into the Federal Transportation Fund to keep it running.  For a look at the situation Maryland and Virginia are facing click: Here

Now, there’s a good chance our transportation funding for the states will be bailed out, since Obama’s stimulus package is going to have a strong transportation component.  I have my own views on what kinds of projects should be funded, but I’ll save them for another day.  But the fact of the matter is that our transportation dollars are tied to an unreliable source of revenue.  Even if the economy recovers and people start driving more, gas prices will just go back up again, causing people to drive less.  Ultimately, we’re eventually going to find the cost of gas right back on track to where it was this past summer.  We were just “fortunate” *cough* enough to have the economy blow up.  Unless people and politicians want to be unsure of our transportation funding for the years to come, we need to find a new source for transportation dollars.

There’s another reason why changing the source of funding would be useful.  A lot of transportation advocates, environmental advocates, and politicians talk a lot about increasing access to transit and providing new and improved mass transit.   I think we all would like to reduce our consumption of foreign oil.  Naturally, there is on one hand a strong incentive to take cars off the road, and reduce the amount of gas people use.  On the other hand, the need for funding  from the gas tax for both our roads, as well as all of these transit projects provides a contrary incentive for people to drive more!!! How are we going to actually reduce driving and promote smarter growth if our gas tax forces decisions in favor of more roads and more driving?

This has to change.

So I think there are a couple of ways to go about this, and they’re pretty simple.  This goes for both the feds and the states.

#1.  Keep the gas tax, but have it just go into the general fund that the rest of our tax dollars go to.  Then, draw from the general fund for transportation projects, as opposed to drawing from the separate fund we draw from now that it reliant on the gas tax.

#2.  Just eliminate the gas tax, and provide transportation funding from the general fund.

I know a lot of Americans would like to see an even lower price of gas, as well as one less tax.  However, this would encourage more driving, and increase our use of oil.  So I would support just feeding the gas tax into the general fund.  However, as a compromise, I would be open to looking into just eliminating the gas tax altogether in exchange for unchaining our transportation fund and our gas consumption, and increased funding for mass transit.

That’s my take on the situation.  I will probably write an Op-Ed column next semester related to this issue for my school paper.


  1. Great post. I don’t see why more regular people who use public transport aren’t talking about this. Mind if I repost on my twitter and tumblr sites?

    Comment by Fio Maravilha — December 20, 2008 @ 11:48 am | Reply

  2. Thanks, I’m glad you liked it. Yeah, feel free to repost as long as there’s a link to my post. Happy Holidays!

    Comment by Matt Dernoga — December 20, 2008 @ 1:46 pm | Reply

  3. Done and done. Thanks! See here:

    Comment by Furacão Neguinha — December 21, 2008 @ 12:08 am | Reply

  4. looks good!

    Comment by Matt Dernoga — December 21, 2008 @ 2:15 am | Reply

  5. Putting the gas tax revenues into the general fund is the worst thing that could be done. You obviously have not had to deal with politicians. Without that dedication, transit and transportation would get LESS funding. Its only because its dedicated that their is even decent funding for transportation. We have this problem now in NJ, where gas taxes not dedicated to transportation have been used in the general fund, and on an inflation adjusted basis, there is less for transportation.

    The other big missing piece most transit and environmental advocates don’t recognize is the cost to operate transit. Its not the bucks to build new projects, its the bucks to maintain and operate transit where the real problem lies. About 70% of transit operating costs are labor, to actually run the bus or train, maintain the equipment, collect revenue, etc. It costs tens to hundreds of millions, but no one wants to fund on-going operations. Revenue typically pays about 25 to 50% of operating costs. Where do the rest come from? Local taxes, real estate taxes, state funding. Unless you address this issue, transit will never be able to expand

    Comment by Tom Marchwinski — December 24, 2008 @ 12:37 pm | Reply

  6. Actually Tom, I live with a politician, and deal with them quite often in my position in the advocacy student group I’m part of(elected official liasison). I get what you mean though. Let me repackage my position this way… No idea or position is going to work well and adequately benefit the people if the bill that addresses it is a bad bill. If you have bad policy, it doesn’t matter whether or not the idea the policy is geared to is good for bad. I can’t speak to New Jersey(if you have a source showing me that NJ has less funding for transportation than it would have if it’s gas tax all went to transportation, then by all means provide it). However, even if what you claim is accurate, just because New Jersey botched the idea with bad policy or political neglect to transportation doesn’t mean that the idea would not work in other states, or for the country.

    In regards to ur point about operating transit, I actually do recognize the cost. Quite frankly, the way to fund on-going operations is to GIVE TRANSIT MORE FUNDING. However, tying back to the original point of my post, transit isn’t going to get more funding if its revenue is reliant on the gas tax because right now as it stands building transit decreases revenue for transportation. Transit will never be able to expand as long as there’s a far far greater incentive for the government to fund roads and promote driving.

    One thing that road lovers(and politicians) don’t recognize is that roads actually have a high maintenance cost as well. In fact, the cost of upkeeping our roads is MORE than the cost of upkeeping transit. Throw in the fact that roads usually generate sprawl, and the cost of upkeeping all the infrastructure that sprawl generates drains even more money. Why do you think that a large part of the Obama stimulus package is going to be addressing transportation and infrastructure projects from last century? It’s because the gas tax doesn’t provide enough money to fund and upkeep all of the roads and infrastructure we are building. So therefore, I reject your notion that transit is more costly than roads.

    One part of my post you fail to address is the fact that having transportation funding tied to an unreliable tax will get you screwed. It’s screwing everyone this year, and likely will screw us over even more next year. Ultimately, we’re going to end up reducing driving and once the economy recovers the price of gas is going to rise to a level in which people will drive far less. Throw in the fact that plug-in hybrids and electric cars are going to be hitting the market in the next decade, and I think governments will be hit very very hard by a lack of funding from the gas tax. Therefore, we’re inevitably going to be doing what I suggested anyways. I’m simply suggesting we beat reality to the punch for once by getting out of this before it gets really bad.

    And by the way, without the gas tax, I know politicians will still have the motivation to fund transportation. A common line is “never stand between a politician and asphalt”. Bringing back funding and improvements for roads and new transportation projects(and pork!) is the way politicians get reelected. They’re always going to fight hard for those dollars. You obviously have not had to deal with politicians(actually you probably have i was just mimicking you).

    Comment by Matt Dernoga — December 24, 2008 @ 1:40 pm | Reply

  7. […] Federal and State Transportation Funds Need New Source […]

    Pingback by Panel Agrees with me on Disease, not Treatment « The Dernogalizer — January 1, 2009 @ 9:42 pm | Reply

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