Bacon's Rebellion

Democracy Thrives in Sunlight

One Mile Forward, Two Miles Backwards

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by

James A. Bacon
in ,

Critics of Governor Bob McDonnell’s transportation tax package, which would scrap the gas tax in favor of a higher sales tax, have focused on a perverse unintended consequence: Reducing the cost of driving will encourage motorists to drive more, thus making congestion worse.

How much? Here’s what Mark Burris, an associate research engineer with the Texas A&M Transportation Institute, told the Virginian-Pilot: If the price of a gallon of gasoline fell 17.5 cents per gallon, the number of miles driven in Virginia might increase by about 1.25%.

— JAB

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5 responses to “One Mile Forward, Two Miles Backwards”

  1. larryg Avatar
    larryg

    what I’d be interested in – is how much more gasoline (and non-gasoline) business would Va attract from adjacent states and travelers waiting to fill up until they get to 15 cents cheaper gas.

    It’s no secret that folks in Charlotte NC buy their gas in South Carolina where the tax is 20 cents less per gallon.

  2. TMT Avatar
    TMT

    The Feds should impose an 80% tax on the gains from the sales of commodities held less than six months, with half the proceeds going to infrastructure and the other half going to pay for a reduction in the capital gains tax for investments held more than five years.

  3. DJRippert Avatar
    DJRippert

    1.25%?

    McDonnell has solved the intractable problem of transportation funding in Virginia and the downside is that people may drive 1.25% more? McDonnell has taken the Imperial Clown Show in Richmond out of the long term transportation funding equation and the negative is a 1.25% increase in driving.

    McDonnell should be nominated for sainthood.

    1. James A. Bacon Avatar
      James A. Bacon

      How many billions of dollars will it take to accommodate that extra 1.25% in traffic?

      1. DJRippert Avatar
        DJRippert

        .0125 * VDOT’s annual budget?

        Just over $40M per year.

        Out of a budget of $3.4B

        Of course, the state tax of $0.174 per gallon represents about 4.5% of the cost of a gallon of gas. If gas goes to $3.75 it will wipe out the additional driving caused by the reduction in the state tax.

        Once again, there are theoretically better plans than the one proposed by Bob McDonnell. However, those theoretical plans will never see the light of day with our inept state legislature.

        Is a 1.25% increase in driving painful? Yeah, a little.

        Is a $40M increase in road costs per year attributable to the extra driving painful? Yeah, a little in a state with an annual budget 1,000 times that big.

        Just call the extra driving and costs The Clown Show tax. When you let your state legislature operate as a clown show it costs some money.

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