(Opinion): The Next “Green” Problem: Paying for Highway Construction and Repair

Being a member of the reality-based coalition, I love the idea of hybrid and electric cars. Makes me happy to stick it in the eye of Big Oil, that Castro-esque nut in South America, and OPEC.

But the next thing we need to start thinking hard about is something we all hate…which is linked to something we all love. The collection of gax taxes and a smooth, efficient road system.

As we all know, gas taxes pay for road construction and repair.  Even though we hate the tax, we despise pot-holed roads with a religious fervor. Here in Chicago, we’re afflicted by a new breed of pothole, smaller but substantially deeper; perfect for shearing wheels and axles.

The tax is reasonably efficient in its administration.  He who buys gas helps pay for the roads.  How much do we buy and pay?

In 2007, Americans purchased 142 billion gallons of gasoline, which at 18.7 cents per gallon, gave us about $26 billion dollars in federal funds for highway repair.  That was based on an 2006 average of 23.27 mpg for all US passenger cars and light trucks. Clearly the number doesn’t include diesel taxes or state fuel taxes as well.

Just before I was ready to sharpen a pencil and do some “cipherin’”, as Jethro Bodine called it, I saw this great analysis on lost gas tax revenue due to higher MPG by the great state of Oregon. It’s from 2005, which shows you some people have been thinking about this for awhile. The study is a quick but dense read, so I encourage you to go to to page 6 for the assumptions, and page 8 for the conclusions.

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Bottom line, if MPG increases by they foresee a big dip in tax revenues against current (2005) averages. Let’s look at 2010. Oregon says without an improvement in their 2005 state average MPG of 19.78, they’d rake in $493.4 million in tax revenues (see Column B). If there is a “medium” increase in MPG, the state estmates that they’d see just $433 million in gas taxes. Needless to say, $60 million is a lot of money to make up.

The report was part of an effort to insitute a road “user tax”, which is similar to what the Brits have. Not a very good idea, and the wrong horse to back in a race. Plus, from a political point of view, it’s a quick way for the average pol to take an early retirement.

But…hats off to Oregon for starting to think about the problem.

Something about that phrase, “be careful of what you ask for…you may get it” is ringing true.

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