This coverage is made possible by grants from the Central Corridor Funders Collaborative and The McKnight Foundation.
Looking for a new way to pay for Minnesota’s roads
Courtesy of MnDOT
With fuel efficiency on the rise, gas taxes may no longer provide enough revenue to maintaining the state's roads.
Everybody agrees that America would be better off if we used less gas. We wouldn't be so dependent for oil on countries that don't like us. Our air would be cleaner, and our family budgets would look a little less grim.
Some people have already cut down by riding bikes or taking public transportation. The rest of us (a group in which I include myself) are too lazy and/or old and/or crotchety to put up with the inconvenience. Our hope is that at some point in the near future our cars will get 90 miles to the gallon or run on dirty water.
When that day arrives, however, there'll be a problem. Where will we get the money to pay for our roads and highways?
Right now, gas taxes fund much of highway construction and repair. The federal tax on gasoline is now 18.4 cents per gallon; Congress hasn't had the guts to raise it since 1993. Minnesota's levy is 28 cents per gallon, and it's due to tick up by one-half cent on July 1. (The average among the states is 31.1 cents.) The state raked in $823 million in 2010, which is about 80 percent of the highway budget. The rest comes from sales taxes on vehicles and registration and licensing fees.
Those revenues are already taking a hit. Vehicles are increasingly fuel-efficient. The average car now gets nearly 32 miles a gallon, up from 27 in 1985. By 2018, the U.S. Department of Transportation is projecting an increase to nearly 34 mpg. So, even though Americans are driving more -- double the number of miles in 1980 -- we are using only 50 percent more fuel, and experts predict consumption to rise only modestly in the next 15 years. (Those cyclists, train riders and car poolers are probably having an effect, too.) The state is estimating a -- gasp! -- $50 billion shortfall for road construction and maintenance over the next 20 years.
Annual Minnesota state gas taxes paid
Humphrey School of Public AffairsAs fuel efficiency increases, gasoline taxes become a less-reliable source of funding for the state's highways.Lee Munnich, a senior fellow at the Humphrey School of Public Affairs, summed it all up at the 23rd Annual Transportation Research Conference held this week: "The question is who is going to pay for the roads as vehicles become more fuel-efficient?"
One possible answer from the folks at MNDOT: MBUF.
True, the acronym sounds faintly pornographic, but it stands for Mileage-Based User Fees. Rather than pay for road use by the gallon, people would pay by miles driven. So those who own Priuses or electric cars -- and cause the same damage to the roads -- would no longer get a free (or cheap) ride by buying less fuel.
How it works
Researchers from MNDOT and elsewhere explained how such a system might work. Every car would have a device installed, a kind of GPS or global positioning system. It would contain customized software that counted miles and periodically collected a fee by credit card or PayPal.
A demonstration of the technology, authorized by the 2007 Legislature, is already underway, with its last wave launching this month. So far, drivers in Wright County have tested devices for four-month periods. According to Christopher Armstrong of Science Applications International, which conducted the test, preliminary results showed that drivers pretty much liked the system -- and liked it more as the test went along. And, the demo was set so that drivers wound up with much the same bill they would have had if they had paid gas the tax. What's more, the devices not only kept track of miles but issued safety warnings when, for example, the car entered a school zone or exceeded the speed limit. In fancier variations, the system could levy extra charges if the car used roads that were highly congested or traveled at times when traffic was heavy.
There were some drawbacks. Some people forgot to put the mile-counter in their cars. The devices weren't always accurate. Drivers thought the safety warnings were useful -- for other people, of course -- but distracting.
Researchers were surprised to learn that drivers weren't that concerned about privacy. The government or whoever else had access to the information would know where you went and when, for example, that seedy motel on Route 25 or the ice cream parlor that Weight Watchers told you to avoid. But those in the study were less worried about the government than hackers who might steal credit card numbers.
An opinion poll conducted about the same time found that Minnesotans liked the idea of MBUF and thought it would be fair to charge drivers of heavier vehicles more, since they put more stress on the roads. They weren't wild about congestion and time-of-day pricing, however, because most people can't choose when they have to report for work or pick up their kids from daycare.
Industry objections
MBUF sounded very cool, but then representatives of the trucking industry raised objections. Some were silly -- that the system would be inflationary, for example, if it assessed charges by vehicle weight.
But others made sense. Daniel Murray of the American Transportation Institute, a trucking association, pointed out that buying and installing the devices would cost billions. Instead of collecting the tax from a relatively small number of oil companies, the state would have to create an expensive system to exact payment from hundreds of thousands of drivers. Boosting collection costs would leave less money to fix and build roads. Hybrids and electric cars would continue to be a tiny portion of the market, he argued. So gas taxes would still be a reliable source of funding.
John Hausladen of the Minnesota Trucking Association contended that MBUF was "a bad, unnecessary idea, just an effort to get more money." There are more efficient ways to raise funds for highways: increase the gas tax and hike registration and licensing fees.
Several speakers pointed out that in the current anti-tax climate, it wouldn't be so easy to get legislators to raise the gas tax. Others said that getting legislators to pass the mileage-based system would also be tough.
Margaret Donahoe, executive director of the Minnesota Transportation Alliance, an advocacy group, summed it all up. "It's hard to get anything passed," she said.
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Comments (12)
Bad Idea
Given the recent supreme court ruling United States vs. Jones, which had to do with warrantless GPS tracking on vehicles, in the decision the justices specifically talked about there being a difference between the police adding a device to the vehicle to track and differentiating that from gps that already existed in the vehicle. Once that GPS is added, per this decision, we are subject to tracking warrantlessly. People may not be concerned from asked in the abstract in polls now, but that is a huge invasion of privacy that many are uncomfortable with when it becomes a reality.
There are going to be bigger fights than this, such as the amount of gas tax that is taken away for mass transit. I'm all for mass transit and bike trails, etc.. But drivers should not be paying for it, the gas tax should exclusively go for roads/bridges. That is a more realistic fight that we will likely be having before a per mile pricing model.
Why isn't this model used now for mass transit and bike trails? Put the devices on people's bikes so they can pay for the trails while they're being used. Make the light rail cost no fair, and people pick up a device when they get on, and then pay for the miles traveled when they exit. Would people consider this to be just as fair as long as the pot of transportation funds are paying for the same things?
The Gas tax is NOT used for mass transit
Rus Schultz;
The gas tax is not used for mass transit. Per the Minnesota Constitution Article 14 Section 10:
Sec. 10. TAXATION OF MOTOR FUEL. The legislature may levy an excise tax on any means or substance used for propelling vehicles on the public highways of this state or on the business of selling it. The proceeds of the tax shall be paid into the highway user tax distribution fund.
You are going to have to find a different fish to fry.
Road damage
The vast majority of the road damage that we see is caused by either:
- Freezing / thawing cycles (which may as well just be assessed evenly, per automobile, in our licensing/registration fees)
- Heavy duty trucks and semis
A single fully-loaded semi truck does as much damage to our roadways as roughly 10,000 automobiles traveling the same distance. Worrying about the amount of road damage these 3000lb Priuses are doing and not paying for is basically not seeing the forest for the trees.
If people start replacing their gas-powered vehicles for electric-only vehicles (hooray!), then we can simply assess them a small surcharge on their annual registration fees. Problem solved.
I can only hope that our state doesn't spend billions of dollars and rack up endless bureaucrat-hours for this privacy nightmare, simply because they don't have the guts to raise our already quite low gas and registration taxes.
Road funding
Since the damage to roadways increases as a cube function of mass it is only fair that registration or usage fees reflect that fact. A three ton pickup or SUV produces more than 3 times the wear and tear on the road than does the typical 3500# car.
A Suggestion for Funding MN Roads
When are we going to start thinking concisely, coherently, and cooperatively on all sides of the table when it comes to funding MN infrastructure and all? The acronym, MBUF; mileage based user fees; put simply should be "toll roads"! It meets the criteria and definitions of MBUF and if administered properly toll roads do work. Toll roads are an American tradition that dates back to pre-Revolutionary days.
Lets take a look at some ideas:
A] Minnesota has a finite population vs its land and infrastructure sizes. Thus, taxable revenues from gas taxes etcetera are also finite. Also, Minnesota's population will be substantially older as baby boomers retire and leave the work force. Taxable revenues will thus exponentially be severely finite if based on no state income growth..
B] Minnesota highways and related infrastructure, IE bridges and all, are in need of constant maintenance, redesign, and renewal. The system is slowly deteriorating from increased &/or over usage besides deteriorating from being under-designed for the future. The present incoming revenues can not or has not kept pace with the strains of usages or upkeep.
C] Minnesota mass transit capabilities are under utilized, under developed, and grossly under funded. Minnesota talks a good talk on mass transit but is in the proverbial dark ages when it comes to implementing said mass transit structures or capabilities. People still have the drive-to-everywhere mentality when it comes to commuting or daily routine transport. Suburban sprawl doesn't help the situation either.
D] The metro area doesn't have a unified, cohesive, and stable Metropolitan/Regional Transit Authority[MRTA]. The present MTC or MTO, or whatever, is fractionated, politicized, and cumbersome. Not only is a MRTA, a quasi business answerable to its constituencies, but an efficient well run business that provides the best in mass transit/transportation intermodally to the region. So far, only light rail transit[LRT] is slowly and painfully being structured on a limited area.
E] The metro area, as well as the whole state, has a highway system that is 'grossly' under-designed. The present infrastructure systems were obsolete before they were even off the drawing boards. Planning seemingly didn't consider the future usages and all while there has always been a penny-wise, pond foolish mentality when it came to future planning. It doesn't take an Urban Planning degree to see that poor infrastructure and transportation systems limit economic and development growth.
F] Now with the aforementioned having been said, MBUF spells toll roads and supporting organized systems for such. Minnesota has the advantages of looking over and reviewing nearly 300 years of American toll road usages and history. There are benefits and pitfalls to toll roads but all the facts are clear to be seen. Minnesota has the wherewithal and brain power to come up with viable solutions to make toll roads work and self-sustaining. Thus solving the problem of Mileage Based User Fees---the more miles you drive the more you pay in tolls. The same holds true for major new bridges, tunnels, and turnpikes. Many turnpikes and bridges in the Midwest and the Eastern US have paid for themselves several times over with tolls[aka-user fees]. However, there are some caveats that Minnesota could learn from when instituting its own MBUF system. Minnesota can learn from its predecessors on how to implement its new system.
When all is said and done, Minnesota can create and maintain a model of efficiency, style, and forward thinking concerning its transportation infrastructures and operations. The backward mindsets that have hindered the way of transit/traveling in this state must change. Jobs, the state's economy, and individual freedoms &/or quality of life are at stake. Toll roads are just a few of the future ways to go in this state. Otherwise, our way of life, businesses, and well-being will be memories in the wind. Now this is something to think about.
Talk About Cumbersome
Using tolls to finance ours roads wholesale? In lieu of the gas tax? Just how would that work? Toll booths on every road, highway, bridge and street? Because if tolls are charged on just some roads why would other roads be "free"?
Tolls may be fine for certain situations, but I hardly see how they can be used to replace the gas tax.
I think a good place for tolls is The Bridge To Sprawl. Five bucks per crossing during rush hours, including west bound on Fridays from 2PM to 9PM and east bound Sundays fro noon to 8PM. Three bucks during off-peak hours.
Weigh more? You should pay more.
As a driver of a hybrid coupe [60 mpg lifetime average] I've paid precious little in gas taxes over the 188,000 miles I've driven it, mostly in Minnesota. I put on a lot of country miles, and many county trunk roads are in horrendous shape statewide. Sure, I'll pay more to get better roads for everyone. I dare the trucking industry to put more 'skin in the game' for roadway improvements, too.
Because little lightweight cars like mine are NOT the ones that wear roadways out. It's the weight of big rigs like gravel trucks, dump trucks and giant equipment-hauling tractor trailers that beat pavement into premature failure [follow them and observe i.e. North Dakota oil rig country]. Under the status quo, truckers' fuel taxes aren't proportional to the damage their heavy loads cause to our public rights-of-way. No surprise the trucking industry greatly prefers to externalize this cost onto other road users -- and has done so for many years -- but it's not in the public interest.
So whether we go to an MBUF model or a wheelage or another type of tax, whatever can be agreed upon, vehicle weight needs to be weighted more heavily.
Gravel
Bring back gravel, paved roads are overrated.
The new way
A fine piece, Ms. Harris, about an issue that almost all of us will have to deal with at some point in the (near) future. Highway engineers have told me that first-time construction is only 40 percent of the cost of a road – 60 percent of the cost over a road's useful life (roughly a generation, depending upon the amount and kind of traffic) before a complete rebuild is necessary is maintenance. Not many highway departments at any level are so flush with cash that they can afford to set aside in trust, for future maintenance, an amount that significantly exceeds their up-front construction cost. Most highway departments are gradually losing ground as maintenance costs rise, so doing nothing about this is not really an option unless we're prepared for EVERYONE to ride a bike, or to go back to horses and buggies.
Having read through Francis Ferrell’s list of talking points, most are hard to argue with. Coming here from another state, I’m especially on board with D) and E). The metro area features some of the most atrocious highway and interchange design I’ve ever seen.
That said, however, a debate between MBUF and toll roads strike me as essentially a semantic exercise. The desired result is basically the same, and the expense and bureaucracy necessary to monitor however many vehicles there are in Minnesota, while sizable and genuine, is largely counterbalanced by the hassle of stopping to pay a toll every few miles. If the response to the latter is to use a transducer, as many areas with lots of toll roads already do, then you’ve essentially created the MBUF system anyway.
Having recently negotiated a “bypass” route around Chicago, I can vouch for the irritation of being an out-of-town driver and having to stop seven (yes, seven) times over a span of no more than 20 miles to pay a toll – all in order to avoid having to negotiate downtown Chicago highways during rush hour. The treatment of visiting drivers, by the way, is something I’m not seeing anyone mention so far – what about out-of-state drivers? Toll roads are going to affect everyone, whether local or not. MBUF would seem to be something levied exclusively on Minnesota residents. THAT little point might make a difference for some.
Beyond that, I’m inclined to agree with L.A. Krahn. Minnesota roads are not being destroyed by an army of Priuses(?), Corollas, Neons, Cruzes, Focuses, etc. The worst offender might well be weather. Even if the climate changes significantly, we’ll still have winter here, and a few nights of freeze-and-thaw coupled with heavy traffic spells damage for roadways even with relatively lightweight automobiles. Trucks are a separate issue, and I’d rate them a very close second to weather in terms of damage to roads. The issue is – and has been, and seems likely to continue to be for the foreseeable future – weight.
The semi-trailer in front of you on 35E may sport a big sign on the back about how it pays $4,439 in road use taxes every year, but there’s no reason to be sympathetic. Interstate reconstruction from the damage caused by 80,000-pound loads is – especially in urban areas – millions of dollars per mile. The trucking industry, as Krahn suggests, doesn’t come close to paying for its share of maintenance and rebuilding expenses for the state’s roads, and yes, it’s understandable that the industry’s representatives would want to “externalize” those costs. That’s a polite way of saying “We caused the damage, but we’d like YOU to pay for the repairs.” It’s definitely NOT in the public interest.
I’m OK with gas tax increases, increases in license fees, etc. The roads in my part of the metro area are a real mix, with some highways just repaved and in great shape, others already at level “D,” and in need of serious attention – soon. Whatever financial solution ends up being adopted, however – and since we really don’t yet have the ability to eliminate winter or otherwise control bad weather – vehicle/axle weight ought to get far more prominence in whatever calculus is used to determine who pays how much to use Minnesota roads.
Just raise the gas tax
Look, the main reason people claim they drive is convenience, so you're not just paying for road damage, you're paying for convenience. Suck it up and pay. Seriously, the price of gas went up two dollars and you didn't stop buying gas, now you're saying a 15 cent tax hike is gonna kill you? I do think the trucking industry should pay more however.
Frustrated
As someone who commutes 25 miles one way to and from work every day, and sits in rush-hour traffic for up to 2 hours on a beautiful sunny day, I can only say I am yet again frustrated at the prospect of paying even more taxes to supposedly enjoy the "quality of life" I already pay for. The value of my home has gone down, yet my taxes continue to rise. I am considered "middle class" yet over 30% of my check goes to federal and state taxes. This new idea of a "# of miles" tax is clearly a violation of privacy and will affect people's decisions in where they live and where they choose to work. Many of us don't have a choice--we are lucky enough to have a job, and it's not our fault we have to drive that many miles. Why should we be penalized? We are prodded to buy fuel-efficient cars--given tax breaks to do so, and now, guess what? We'll lose that money we are already saving. Commuters already pay more in gas than those that don't commute so far. Perhaps we should just quit our jobs and let the government take care of us...seems much easier to me. We are given no incentive for all our hard work and commitment!
Tolls vs Taxes: Either way you pay
Most of the respondents in this discussion are users of the roadway but clearly aren't learned on things like axle weights and user fees. The gentleman who said a truck is equivalent to 10,000 cars couldn't figure out what "AASHTO standards" are. That said, at the end of the day, in a free market, everyone pays the cost of freight. If you want the trucks off the road, either stop shopping at target and walmart OR drive way out into the rural areas and pay more at the local five & dime. You consumer hypocrites want everything your mind can imagine, at the lowest conceivable price (while yo complain about jobs moving to China), and then complain ABOUT THE TRUCKS NOT PAYING THEIR FAIR SHARE?? Geez, talk about the dumbing down of America.