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Report: Gasoline Taxes Cover Only Half of Highway Expenses

1 min readBy: Joseph Bishop-Henchman

SubsidyScope, a Pew initiative, is producing a series of reports looking at transportation funding. In October, they scrutinized Amtrak and estimate that the railroad loses about $24 for each passenger carried. Pew’s numbers show that Amtrak recovers about 68.5% of its costs from fares.

At the end of November, Pew took on highways:

Subsidyscope has calculated that in 2007, 51 percent of the nation’s $193 billion set aside for highway construction and maintenance was generated through user fees-down from 10 years earlier when user fees made up 61 percent of total spending on roads. The rest came from other sources, including revenue generated by income, sales and property taxes, as well as bond issues.

Of course, some highway “user taxes” (a more accurate description than “user fees,” since gasoline taxes are taxes not fees) are diverted to non-road uses. Even throwing them in leaves roads as more subsidized than Amtrak:

Of the 18.4 cent per gallon federal 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. on gasoline, 2.86 cents are allocated specifically for mass transit projects. Another 0.1 cent per gallon is used to pay for environmental cleanup resulting from leaking fuel storage tanks. From 1990 to 1997, the federal government also set aside a portion of taxes on gasoline, diesel and other fuels to reduce budget deficits.

However, even if those funds were fully devoted to highways, total 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. revenue accounted for only 65 percent of all funds set aside for highways in 2007, according to Subsidyscope calculations. This is down from 84 percent in 1997 and 77 percent in 1967.

Pew’s data and charts, as well as the full report, are here.

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