Study: highways receive far more subsidies than transit

Gas tax only pays for 20%

Steve Hawley, Oct 14, 09.

Highways receive almost $30 billion in subsidies every year compared to just $9 billion for transit, according to SF Gate. The article notes, “For the gas tax to pay for highways (not even local roads), it would have to be on the order of a dollar per gallon. The tax is just 18.4 cents a gallon. That’s a federal subsidy of about 80 cents per gallon of gas used on the highway.”

$1.5 billion of that comes in the form of tax breaks for parking. The article states: “Looked at in terms of your own wallet, a taxpayer is eligible for just over $200 in employment-related tax-free parking for month and less than $100 in such transit costs.”

It concludes:

Also consider this: Each dollar in subsidy directed at driving has two effects that, unlike chocolate and peanut butter, don’t go well together: (1) increasing driving, which costs the government money and makes driving less efficient (i.e., more congested), and (2) by making driving unrealistically cheap, subsidies force transit systems to lower prices in order to retain ridership, which keeps them strapped and sub-par.

That situation has a name: It’s the status quo.

Under the current federal transportation bill, which has been extended through the end of this month, the federal government covers 80 percent of the cost of highway projects compared to just 50 percent for transit projects. Some lawmakers want to create a more level playing field by passing a new transportation bill, but the Obama administration, supported by the Senate, has proposed extending the current bill into 2010 or 2011.

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