I've received a lot of praise for our report last week estimating the share of road expenses borne by user fees (such as tolls and other payments by users for benefits they specifically get) and gasoline taxes (a user-related taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. ). Most other research on the topic focus on road trust funds, but our analysis looked at how state and local road spending (and transportation spending generally) compares to what state and local governments raise in user fees and user proxies like gasoline taxes. (The difference between the two is an important one to make, as even experts commonly and mistakenly conflate gasoline taxes and user feeA user fee is a charge imposed by the government for the primary purpose of covering the cost of providing a service, directly raising funds from the people who benefit from the particular public good or service being provided. A user fee is not a tax, though some taxes may be labeled as user fees or closely resemble them. s.)
A thoughtful comment by my former colleague Josh Barro expanded the table to include federal gasoline tax revenues, and I've gotten a request over the weekend to break apart tolls from gasoline taxes. A combined chart with all of these things is below.
Expanding tolls and indexing gasoline taxes for inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. may not be politically popular even though transportation facilities and services are highly popular. Given that transportation spending exists, states should aim to fund as much of it as possible from user-related taxes and fees. Subsidizing highway spending from general revenues creates pressure to increase income or sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. es, which can be unfair to non-users and undermine economic growth for the state as a whole.
Table: Share of State & Local Road Spending Covered by User Taxes & User Fees, including Federal Aid Financed by the Federal Gasoline Tax, 2010
State |
Share of Road Spending Covered by State/Local Tolls & User Fees |
Share of Road Spending Covered by State/Local Gasoline Taxes |
Subtotal: Share of Road Spending Covered by State/Local User Fees & User Taxes |
Rank |
Share of Road Spending Covered by Federal Aid Financed by Federal Gasoline Tax |
Total, Share of Road Spending Covered by State/Local User Fees & User Taxes, Plus Federal Aid Financed by Federal Gasoline Tax |
Rank |
|---|---|---|---|---|---|---|---|
| Alabama | 0.4% | 30.2% | 30.6% | 24 | 24.9% | 55.4% | 16 |
| Alaska | 3.6% | 1.7% | 5.2% | 50 | 14.6% | 19.9% | 50 |
| Arizona | 0.9% | 30.2% | 31.0% | 22 | 15.9% | 47.0% | 29 |
| Arkansas | 1.6% | 36.7% | 38.3% | 12 | 23.2% | 61.4% | 7 |
| California | 3.6% | 19.1% | 22.7% | 39 | 11.7% | 34.4% | 48 |
| Colorado | 6.6% | 24.1% | 30.6% | 24 | 24.7% | 55.4% | 17 |
| Connecticut | 0.1% | 31.1% | 31.2% | 21 | 21.9% | 53.1% | 22 |
| Delaware | 41.4% | 17.8% | 59.3% | 1 | 20.5% | 79.8% | 1 |
| Florida | 14.1% | 35.6% | 49.7% | 2 | 15.3% | 65.0% | 6 |
| Georgia | 0.8% | 24.8% | 25.6% | 34 | 24.1% | 49.7% | 24 |
| Hawaii | 0.5% | 20.6% | 21.2% | 42 | 22.9% | 44.1% | 36 |
| Idaho | 2.3% | 23.7% | 26.0% | 32 | 23.1% | 49.2% | 25 |
| Illinois | 8.3% | 18.4% | 26.8% | 30 | 10.8% | 37.6% | 43 |
| Indiana | 0.3% | 27.8% | 28.2% | 29 | 28.2% | 56.4% | 14 |
| Iowa | 0.4% | 19.0% | 19.4% | 46 | 34.4% | 53.8% | 20 |
| Kansas | 5.0% | 24.8% | 29.8% | 27 | 17.9% | 47.7% | 27 |
| Kentucky | 0.3% | 28.9% | 29.2% | 28 | 17.0% | 46.3% | 32 |
| Louisiana | 1.6% | 20.3% | 22.0% | 40 | 22.8% | 44.8% | 35 |
| Maine | 13.8% | 28.8% | 42.7% | 6 | 13.0% | 55.6% | 15 |
| Maryland | 11.4% | 23.2% | 34.6% | 16 | 11.1% | 45.8% | 33 |
| Massachusetts | 15.7% | 25.8% | 41.5% | 8 | 18.9% | 60.4% | 8 |
| Michigan | 3.2% | 26.7% | 29.9% | 26 | 20.3% | 50.1% | 23 |
| Minnesota | 1.1% | 22.5% | 23.6% | 36 | 12.8% | 36.4% | 45 |
| Mississippi | 0.1% | 23.6% | 23.6% | 36 | 23.3% | 47.0% | 28 |
| Missouri | 0.3% | 22.6% | 22.9% | 38 | 19.4% | 42.3% | 38 |
| Montana | 1.5% | 22.2% | 23.7% | 35 | 29.4% | 53.1% | 21 |
| Nebraska | 2.5% | 24.2% | 26.7% | 19 | 15.5% | 42.2% | 39 |
| Nevada | 0.7% | 25.6% | 26.4% | 31 | 16.6% | 42.9% | 37 |
| New Hampshire | 22.0% | 20.0% | 42.0% | 7 | 15.6% | 57.6% | 13 |
| New Jersey | 36.1% | 13.3% | 49.5% | 3 | 10.8% | 60.2% | 9 |
| New Mexico | 1.1% | 18.5% | 19.6% | 45 | 19.0% | 38.6% | 42 |
| New York | 28.7% | 15.1% | 43.8% | 5 | 10.9% | 54.7% | 19 |
| North Carolina | 0.3% | 45.8% | 46.0% | 4 | 22.2% | 68.3% | 4 |
| North Dakota | 1.5% | 18.6% | 20.0% | 44 | 21.8% | 41.8% | 40 |
| Ohio | 5.0% | 36.2% | 41.2% | 9 | 17.5% | 58.7% | 11 |
| Oklahoma | 8.5% | 17.2% | 25.7% | 33 | 21.3% | 47.0% | 30 |
| Oregon | 2.2% | 19.6% | 21.8% | 41 | 14.3% | 36.1% | 46 |
| Pennsylvania | 9.4% | 23.6% | 33.0% | 18 | 12.3% | 45.3% | 34 |
| Rhode Island | 4.4% | 31.3% | 35.7% | 15 | 34.2% | 69.8% | 2 |
| South Carolina | 4.6% | 31.9% | 36.5% | 14 | 18.5% | 55.0% | 18 |
| South Dakota | 0.4% | 16.0% | 16.4% | 48 | 21.0% | 37.4% | 44 |
| Tennessee | 0.1% | 36.6% | 36.7% | 13 | 23.1% | 59.8% | 10 |
| Texas | 9.6% | 29.3% | 38.9% | 11 | 19.7% | 58.7% | 12 |
| Utah | 1.7% | 18.5% | 20.2% | 43 | 12.2% | 32.4% | 49 |
| Vermont | 0.3% | 18.9% | 19.2% | 47 | 21.4% | 40.6% | 41 |
| Virginia | 4.1% | 27.5% | 31.5% | 20 | 16.2% | 47.7% | 26 |
| Washington | 5.7% | 27.8% | 33.5% | 17 | 13.3% | 46.8% | 31 |
| West Virginia | 7.5% | 31.6% | 39.1% | 10 | 27.9% | 66.9% | 5 |
| Wisconsin | 3.7% | 27.0% | 30.7% | 23 | 37.7% | 68.5% | 3 |
| Wyoming | 1.9% | 3.4% | 5.3% | 49 | 29.6% | 34.9% | 47 |
| District of Columbia | 0.0% | 4.0% | 4.0% | (51) | 0.8% | 4.8% | (51) |
| U.S. Average | 7.8% | 24.3% | 32.1% | 18.6% | 50.7% |
Source: Tax Foundation calculations from U.S. Census Bureau, State and Local Government Finance and Federal Highway Administration data.
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