The Economics of Highways (collection, calculate, accounting, union)

[bhsx1187]

I'm kinda tired of the assumption that highways and cars are not subsidized.

I'm going to look at I-287 in NJ (not the NY part). (I am very familiar with the northern half of this road as I travel it every day).

Costs for Large highway maintenance projects in the last 3-4 years

NJ DOT or Federally Funded-
Complete rebuild of overpasses and ramps of the I-80 and I-287 interchange-at least $94.1 Million
Repaving of 9 miles of I-287 (Morris County)-$17.4 Million
Replacement of James St. Overpass $2.2 Million
Repaving about 3 miles of I-287 (Franklin Lakes and Oakland)-$5.4 Million

"Several Million Dollars" for an emergency repair resulting from Hurricane Irene

While originally projected to cost $235 Million for all 62 miles only 46 were built originally but I can't find an cost for those 46 miles. An additional 20 miles were constructed later completed in 1994 at a cost of roughly $1 billion.

So since 2009 a total of roughly $75 million was spent on road work on just the northern most 30 miles of 287 (mile 36-66)(where I travel). I do not know what is being done on the southern part. This total only includes half the cost of the I-80 interchange project and does not include what is probably another 5+ of million for relining about 20 miles or so, trash collection, mowing, winter plowing and salting, electricity for street(highway) lights, installation of multiple highway signs or anything else that I may have missed (I see construction vehicles all the time but not always sure what they are doing).

Now to calculate revenue from the road. (all daily usage numbers come from Interstate 287 (New Jersey))

State Gas Tax-15.5 cents per gallon
Federal Gas Tax-17.4 cents per gallon
Total-32.9 cents per gallon
I will use 20 MPG as the standard

From exit 21 to 37-70,000 Cars
estimate that each car travels only 11 of the 16 miles
Total of 770,000 miles a day

From 37 to 41-110,000 Cars
Estimate that each car travels only 2.5 of the 4 miles
Total of 275,000 miles a day

From 41 to 52-55,000 Cars
Estimate that each car travels only 5 of the 11 miles
Total 275,000 miles a day

From 52-59-70,000 Cars
Estimate that each car travels 5 of the 7 miles
Total of 350,000 miles a day

From 59-66-50,000 Cars
Each Car travels all 7 of the miles
Total of 350,000 miles a day

Between 21 and 66 we will estimate a total of 2.02 million miles a day are logged. At 20 miles a gallon that means that about 101,000 gallons of fuel are used every day on 287. At the NJ + Federal gas tax of 32.9 cents per gallon on $32,320 are collected on the northern 2/3 of 287 in fuel taxes a day. Over the course of a year this grows to an astounding $11 million. While I dont know the actual patterns on the southern part from my few experiences on it, it is generally less traveled then the northern part but we will call it even so therefore a total of 3 million miles a day which leads to 150,000 gallons of fuel, and $16.5 million a year in revenue.

So based on this over 4 years the highway will take in a total of $66 million but $75 million was spent on improvements and maintenance to the northern half. A quick wikipedia search finds another $29 million spent repaving the last stretch from exit five to the NJTP. So the gas tax covers less than 65% of the operating cost of highways in this example (yes i know it will vary by example) (exempting what I previously mentioned but do not have a total for).

So to all you car loving people out there (me included) you don't enjoy the free ride you think you do.

(And doing the math it would take 70+ years to recoup the cost of building the road at today's usage and yesterdays cost without spending anything on maintenance)

[boxus]

Well, highways are the core of our infrastructure, they do much more than just "let us drive our cars", they are of vital importance for commerce, how the heck else you think businesses transport their goods and services? Without the efficient ability to transport those goods and services, you have no job to produce those goods and services. You really think highways are just for someone to drive their car? What business do you work in? I guarantee I can find how our road transport system is vital to your business.

Yes, road construction has become pork spending for politicians, some states are worse than others. There are also road paving unions that are strong in some states, helping the tradition of repaving a road every three years. Road construction is also a politician's favorite as it is one item people get to see, unlike behind the scenes successes, everyone loves a pretty road. So yes, there is plenty of waste, but that it upon the politicians and voters, not a person driving a car; I can not control excess road construction no more than I can control military spending, no matter how I vote, they all do the same dang thing year after year.

[gwynedd1]

How many times are these comparisons made to public transportation? The talk is always how much it will cost while roads and the American military guarding oil access is "free".

[harry chickpea]

Aside from military considerations, public road funding on a national level was used to bring down the power of railroad barons, who were beginning to get too powerful. When computing road revenue, some accounting has to be made for the extra fees and taxes paid by truckers, as well as income from auto licensing and purchase taxes. The roads are "public" but not free.

[cdelena]

I want police and fire protection in my community, the stores stocked, deliveries to homes and business, free commerce, as well as the freedom to drive where I want when I want. None of this happens with 'public transportation' which sucks huge amounts of resources for little return in most places. I am happy to see tax dollars spent on roads as compared to where most of it is spent.

[Malloric]

Originally Posted by gwynedd1

How many times are these comparisons made to public transportation? The talk is always how much it will cost while roads and the American military guarding oil access is "free".

Because public transportation (a) costs a hell of a lot more than highways and (b) gas taxes pay for a lot more of the cost of highways than fares do for public transit. And our military isn't out guarding our access to oil. We get 10x as much oil from Canada and Mexico as we do from Iraq. Afghanistan has about as much oil as my backyard. We already produce 80% of our energy domestically and are on track to become the largest energy producing country in the world by 2020. We're more likely to join OPEC than send our military after them.

[boxus]

Originally Posted by Malloric

Because public transportation (a) costs a hell of a lot more than highways and (b) gas taxes pay for a lot more of the cost of highways than fares do for public transit. And our military isn't out guarding our access to oil. We get 10x as much oil from Canada and Mexico as we do from Iraq. Afghanistan has about as much oil as my backyard. We already produce 80% of our energy domestically and are on track to become the largest energy producing country in the world by 2020. We're more likely to join OPEC than send our military after them.

Well, we do protect the transit path for oil coming out of the Persian Gulf, in which 17 million barrels a day go through. Take that off the world market and oil prices will skyrocket.

[bhsx1187]

I am not saying that the road should not have been built by any mean, But I do think that the NJ and Federal gas tax should be raised. If it weren't for 287 my daily commute would be an hour longer.

While the road is heavily used by truckers as a bypass of more congested, closer to NYC roads the diesel tax is only 3 cents higher. In terms of drivers fees there is about a 60 million dollar a year surplus from the DMV but that is spread across the state on projects. Also that fee does not directly relate to 287, so in my paying of the registration fee I am subsidizing I295 down in the Philly area. So if split evenly year in year out 287 receives only a small fraction of this fund.

In most cases, especially in NJ police and fire do nothing on highways except for patrolling and responding to crashes, not sure how this is related to subsidizing highways.


I am by no means saying public transportation is a better investment with this comparison. I am merely pointing out that highways aren't free and fully paid for as most people seem to believe. Public transportation however can often provide huge returns. Case in point the 7 train extension in NYC. There is a multi-billion dollar redevelopment planned at hudson yards. In addition, dozens of new apartment buildings have been built near the new stop as a result of the expansion. TOD developments are happening all over the northeast and country because of the local transit options.

@harry
I don't know if there is any truth to your rail road claims for two reasons. "Railroad barrons" were alot more powerful around the turn of the 20th century than in the 1950's. Railroads were struggling at the time because of new competition from air and truck forcing them to merge to cut costs. I dont think that the roads were built with the intent of killing off the railroad barrons. (plus its not like one man had complete control of the railroads like they used to, they were public companies in the 50's.)

[bhsx1187]

Originally Posted by Malloric

Because public transportation (a) costs a hell of a lot more than highways and (b) gas taxes pay for a lot more of the cost of highways than fares do for public transit. And our military isn't out guarding our access to oil. We get 10x as much oil from Canada and Mexico as we do from Iraq. Afghanistan has about as much oil as my backyard. We already produce 80% of our energy domestically and are on track to become the largest energy producing country in the world by 2020. We're more likely to join OPEC than send our military after them.

(a) it does not cost "a hell of a lot more than highways."

Most public tranist projects (at least in nj area) involve using an already established (old) ROW bringing costs way down.

(b) Public transportation doesn't cover less of its costs than highways. In my analysis I excluded snow removal, street light replacement, pot hole repair, relining of 15+ miles, electricity, trash collection, mowing, or the highway workers salaries that preform these tasks. This would add millions to my total but I did not have an accurate total so I excluded them. Only looked at the expenses on about half the road but the revenue from travel on the entire road, it only covers about 65% of the annual operating expenses. in contrast NJ transits rail division covered more of its expenses counting everything. In 2008 it was 71% fare box recovery and in 2009 it was 66% both higher. so no gas taxes do not pay more for highways than public transit recovers.

(c) The military does help keep the oil flowing. Freedom of seas keeps the persian gulf as well as a number of important strait safe for shipping. The US stepped into Iraq to prevent Suddam from controling 1/3 of the world's oil production. Oil is treated like a commodity so it does not follow simple supply and demand rules like more products do. So a problem in oil production in a place where the US only imports about 15% of its imported oil from could cause prices to spike in America. And I would like to see where you get you 80% of our own energy its closer to 50%.

[Escort Rider]

O.K., gasoline taxes and other direct fees on automobiles and trucks do not pay for all of the costs of building and maintaining roads, so general tax revenue has to fill the shortfall. This fact quickly becomes part of an emotional battle between public transit (often anti-car) advocates and the rest of us (after all, the majority of us are motorists). The argument is that users of the roads should pay all the costs, because people who do not own cars are unfairly supporting us motorists. That argument is absurd. It is absurd because, first, users of public transit, by their fares, are paying a very small portion of the cost of that public transit, most of which is paid for by gasoline taxes and general tax revenue. Secondly, as already pointed out, non car owners benefit from roads: It is via roads that police and fire protection reaches them, and it is via roads that all the goods are delivered to their local stores and shops.

On the other hand, public transit benefits not only those who use it, but also those who do not use it by relieving the horrible congestion that would prevail without it. (That congestion is horrible enough even with public transit!). In addition, it provides transportation for many people to their jobs, people who might not be able to afford a car. Society is better off that all classes of people be able to reach work locations - those people are then productive citizens paying taxes.

This is one of those polarizing subjects in American life. More heat than light is often produced.