Saturday, November 15, 2008

The Gas Tax Math

Some people seem to think that raising the gas tax would be somewhat comparable to the increase in tolls. Apples and oranges.

I did the math.

10 cents a gallon would cost $1.20 a week if I fill my tank up once a week. Spread that over the course of the year and we're talking $60-70 bucks. Over 365 days of the year, would anyone even notice that?

Average drivers with gas guzzlers would pay maybe $150, tops, but their cars do more damage to the environment and roads anyway. Plus, it's a very small incentive to buy more fuel efficient cars or use public transportation when available. Many of these funds could then be used all across the state to improve the transportation infrastructure.

All of that is a pittance, spare change any given week, compared to the very tangible funds people would see evaporate paying those tolls (which would now go up to $1820/year for drivers going through the Sumner or Ted Williams Mon-Fri) or using public transportation ($200-600/month for most out of the city, plus the cost of gas if someone has to drive).

5 comments:

Mark Belanger said...

The gas tax was set at .21 per gallon in 1991 when gasoline cost an average of around $1.15 per gallon. That means the gas tax was around 18% of the total.

As gas prices(and everything else), increases, this figure drops. At $2.00 per gallon, our gas tax is 10.5%. At $3.00/gal it is 7%. So as time goes on, and the cost of maintaining roads and bridges increases naturally according to inflation, the fixed gas tax becomes less and less able to provide enough money to maintain the infrastructure.

The only sane thing to do, is to set the rate at a competitive .35 per gallon as a minimum, and hereafter make the gas tax a percentage. In theory, as cost go up according to inflation, gasoline and thus the gas tax revenues will increase as well.

It might be wise to set the gas rate to be a sliding value that changes according to inflation.

The cost of maintaining our infrastructure is not static - and gas tax shouldn't be either.

Ryan said...

excellently worded.

Anonymous said...

So when we're in the throws of an OPEC or speculation induced spike in the cost of gas, you're going to raise the cost even more? It would have gone up to 5 dollars a gallon in the recent past. Gas taxes and tolls are apples and oranges, one is for the general health of the roads in the state and one helps pay for specific sites which are used by a smaller proportion of the general populace.

Mark Belanger said...

True that an artificial spike in gas prices would result in an artificially high gas tax. In that case make make the gas tax a percentage tied to CPI, or limited to CPI.

Either way, static revenue meant to cover dynamic costs is a recipe for failure.

BTW - The more gas costs, the happier I am. Price pressure is the only thing that seems to spur serious talk of alternatives. Burning liquid dinosaurs is destroying the planet and causing us to export money, import debt, and engage in ill-conceived misadventures around the world. The sooner fossil fuels are gone, the better off we'll be.

Anonymous said...

You say raising the gas tax a little is an incentive to buy a more fuel efficient, better for the world car. True. Raising the tolls is an even better incentive for people to use public transportation which is an even better eco-friendly solution. Lobby for longer hours for public transportation. I'd love to have public transportation out here, but it is not available at all.

About Ryan's Take