You Don’t Drive? Doesn’t Matter: You’ll Still Pay at Least $1,100 a Year So Others Can
Owning a car is expensive. Turns out, not owning a car is expensive as well.
The average U.S. household subsidizes car ownership to the tune of $1,105-$1,848 a year, according to a detailed, deeply researched report released this spring by U.S. PIRG, a left-leaning non-profit advocacy group. (The PIRG report was highlighted again yesterday, by the Atlantic.)
That cost is borne by all households; including those that do not own a car of their own.
For some of our more car-averse readers, this might seem obvious. But the myth that car owners pay their own way in the form of gasoline taxes and other fees remains widespread.
They don’t. At all.
Since the 1960s, the share of highway spending funded by user revenue (mostly gas taxes) has declined from better than 70 percent to less than 50 percent, the report shows. In 2012, taxpayers — not highway users, but taxpayers — provided $69 billion for highways nationwide.
And of course, there are public costs associated with driving beyond the actual construction and maintenance of the roads themselves, such as the massive expenses associated with vehicle crashes and air pollution. PIRG’s estimate includes those costs, but it leaves out plenty other externalized costs associated with car ownership, such as the consumption of public space for parking and sprawl-related infrastructure.
There are subsidies for other forms of transportation as well. Passenger fares and other revenue only cover about 41 percent of SEPTA’s FY 2015 operating expenses, for instance. The rest is taxpayer subsidy. Of course, mass transit has one or two environmental, safety and land-use advantages over private vehicle use.
What’s the answer? Higher user fees for drivers. Not only would higher fees reduce the subsidy, they’d also reduce the artificially inflated demand created by subsidizing vehicle travel. The Atlantic piece argues it this way:
The conventional wisdom of road finance is that there is a shortfall of revenue—that the country needs more money to pay for maintenance and repair and for new construction. But the huge subsidy to car use has another equally important implication: because user fees are set too low, and because, in essence, people are being paid to drive more, there is excess demand for the road system. If roads were priced to recover even the cost of maintenance, driving would be noticeably more expensive, and people would have much stronger incentives to drive less, and to use other forms of transportation, such as transit and cycling. The fact that user fees are too low not only means that there isn’t enough revenue, but that demand is too high. One value of higher user fees would be that they would discourage excessive use of the roads, lessen wear and tear, and in many cases obviate the need for costly construction projects.