D. Dowd Muska


When Gas Taxes (and Gasbags) Attack!

July 04, 2013

Have some sympathy for Jay Inslee. He didn’t get his tax hike.

The Evergreen State’s governor considers it a “dang shame” that Washington failed to make driving more expensive. A few months ago, a higher gas tax seemed certain. Inslee, “environmentalists,” unions, and “business” (true to form) were on board. But as legislators prepared to leave Olympia at the close of 2013’s second special session, the votes weren’t there.

Most states have entered a new fiscal year. Several eschewed gas-tax hikes that, in the winter, looked likely. Unfortunately, motorists in Maryland (12.1¢), Wyoming (10¢), California (3.5¢), and Kentucky (2.4¢) weren’t so lucky. Connecticut raised its “Petroleum Products Gross Earnings Tax,” which boosted its levy by several cents. Vermont’s May hike, Governing respectfully reported, was divided “evenly between a traditional per-gallon tax and a percentage tax assessed at the distributor level.”

Kentucky doesn’t have much in common with California. A case can be made that Wyoming and Vermont aren’t on the same planet. But anyone who monitors transportation policy understands that two types of politicians favor gas-tax increases: 1) Democrats and 2) Republicans. In regular displays of bipartisan boneheadedness, governors and state legislators -- even during the last decade, when the price of petroleum has soared and the economy has staggered -- pursue “revenue” rather than reform.

The go-to justification for filching drivers during fill-ups is the “infrastructure crisis.” Pols, bureaucrats, taxpayer-subsidized “economists,” construction unions, civil engineers, and lazy media figures insist that the nation is falling apart. “America,” outgoing U.S. Department of Transportation Secretary Ray LaHood claimed in February, “is one big pothole right now.”

Balderdash. The Reason Foundation’s annual look at the states’ management of roads, released a few days ago, explained that while it is “widely believed that the U.S. highway system is crumbling, objective data tell a different story.” Of the more than 16,000 miles of urban interstates, just 809 miles are rated in poor condition. Only 498 miles of the nearly 30,000 miles of rural interstates are subpar.

Traffic is a vexing problem in spots, such as California’s major cities, the Northeast Corridor, Chicago, Atlanta, and Seattle. But on the whole, average commuting times have flatlined in the last decade -- a pattern that is likely to continue, with the growth of telecommuting, employers relocating to suburbs and exurbs, a flaccid economy, and an aging population.

Contrary to breathless press accounts, bridges are not, as transportation analyst Randal O’Toole characterized the hype, “failing on almost a daily basis.” The Cato Institute scholar observed that last year, “more than 34,000 people died in traffic accidents. Virtually none of them died due to a fracture-critical bridge failure.” In the last two decades, “the number of structurally deficient bridges has declined by 44 percent … even as the total number of highway bridges increased from 572,000 to 607,000.”

As Reason’s researchers documented, in 2009, more than $117 billion was spent on state-run roads, and the “overall condition” of the system “was in the best shape ever.”

So what’s behind the constant pressure to increase gas taxes?

First, while a state’s gas tax is usually referred to as a “user fee,” much of the revenue it raises never makes it to highways. Drivers are dunned for thousands of projects unconnected to congestion relief. For pols and other mouthpieces for “public investments,” there’s always another choo-choo line, bicycle path, or “transit-oriented development” to build.

Second, many states make inexcusably inefficient use of motorists’ largesse. Reason’s analysis revealed a nauseating example when it scrutinized “main-office and regional-office costs, research, planning and similar activities.” At $81,249 per mile, “administrative disbursements” in Connecticut were 126 times greater than in Kentucky, the state that performed best in the category. Conferences and “action plans” aren’t cheap. (Neither are no-show jobs for the politically connected.) Prevailing-wage laws and sloppy contractor oversight also contribute to runaway expenses.

The final culprit behind gas-tax mania is a failure of vision. A few states have permitted market-oriented transportation experiments, but much more is possible. When drivers’ needs are met by profit-motivated entities, rather than vote-buying pols, costs fall and performance rises.

If you log a lot of hours behind the wheel, and live in a state that can’t stop raising its gas tax, there are escape options. Not surprisingly, several of Reason’s top performers impose light fuel levies. States to consider include Idaho, Nevada, Texas, South Carolina, and Virginia.

In March, a poll found that 72 percent of Washingtonians opposed a gas-tax hike. Taxpayers, one suspects, have a different take on Governor Inslee’s “dang shame.”

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

# # # # #