Roads do not generate nearly enough gas tax revenues to pay for themselves, according to the November 20, 2009 Keep Texas Moving e-newsletter published by TxDOT. The article, which is not yet available at the TxDOT website, appears to be a reprint of one that the agency published three years earlier.
The article notes that gas taxes go into a general highway fund, so that “the fuel tax paid in any locality of the state is unrelated to the road projects in that locality.”
More importantly, the article says that roads are never paid for, as it will keep generating maintenance and rehabilitation expenses during its approximately 40-year lifetime. TxDOT created an Asset Value Index in recent years to measure the costs and revenues generated by road segments, and it found that “there is not one road in Texas that pays for itself based on the tax system of today.”
Some roads paid for about half of their costs, but most fell far short of that level. The controversial Grand Parkway Segment E, for example, would cost $1 billion over 40 years while generating only $162 million in gas taxes. To fully pay for Segment E, the local gas tax alone would have to be increased to $2.22 per gallon. To compensate for some of this shortfall, TxDOT has proposed making the Grand Parkway a toll road. However, even then, a preliminary financial analysis indicated that the Grand Parkway as a whole would be revenue-negative, meaning it would not generate enough toll revenue to pay for itself. Art Storey, executive director of the Harris County Public Infrastructure Department, said that Segment E would generate sufficient toll revenue, but that “the whole highway is demonstrably a [money-]loser.”
Meanwhile, a recent study revealed that nationwide, only half of all highway costs are paid for by user fees, with the rest coming from other tax sources. Only 51 percent of road funding in 2007 came from fuel taxes, tolls, and vehicle registration fees, down from 61 percent a decade earlier.
In April, Texas Transportation Commissioner Ned Holmes, one of the five commissioners who govern TxDOT, said that the US must fix its transportation system through a combination of tolls, higher taxes, and flexible spending programs.
(Photo Credit: Jasmic)
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