As the General Assembly gears up for a special session to hammer out a transportation-funding “solution,” you’ll hear a lot about the catastrophic decline in gasoline tax revenues. Because maintenance projects get first crack at all state gas-tax dollars, the plunge in revenues translates into a dollar-for-dollar reduction in construction spending. You’ll hear a lot of panicky talk about the cancellation of all sorts of highway projects, and dire predictions of how Virginians will be consigned to traffic-congestion hell.
But there’s a flip to the declining gasoline consumption and gas-tax revenues: People are driving less. Fewer people driving translates into less traffic congestion. In an economically rational world, a decline in traffic congestion would be reflected in scaled-back construction plans. This is not an economically rational world, of course. It’s a world in which a massive share of the economy is directed not by market forces but political forces. And it’s not in the interest of those who benefit from massive construction programs to tell the whole story. So, there’s a good chance you won’t see this information anywhere else.
Estimated vehicle miles traveled (VMT) on all U.S. public roads for March 2008 fell 4.3 percent compared to March 2007, according to a Federal Highway Administration press release. The decline of 11 billion miles traveled that month was the sharpest year-to-year drop since the FHWA started tracking the numbers in 1942.
As a side benefit, fewer VMT means less air pollution. “Fewer cars on the road has translated into a 9 million metric ton decline in greenhouse emissions for the first quarter of 2008 alone,” writes Acting FHW administrator Jim Ray in the Department of Transportation’s Fast Lane blog.
In his blog post, Ray focuses on the fiscal downside. “The less revenue in the Highway Trust Fund, the less funding is available for states to keep roads healthy and efficient – resulting in more traffic tie-ups, more inefficiency, reduced driving and even less funding,” he writes. “This latest trend is yet another reason that we need to overhaul the highway financing system.”
We do need to overhaul the highway financing system to replace the gasoline tax, which will become increasingly obsolete over time. But here in Virginia we also need to re-examine assumptions on how much travel, and traffic congestion, are forecast to increase, and how much money we need to spend to address our need for mobility and access.
It would be farcical to pass a tax increase to compensate for declining Vehicle Miles Traveled and ensuing gas tax receipts without simultaneously taking a fresh look at the lower Vehicle-Miles-Traveled assumptions upon which Virginia’s highway-spending wish lists are based. But don’t expect it to happen. Politics is nothing if it is not a farce.
Update: What’s happening nationally may not be happening in Virginia. In the comments section of a previous post, “Bob” the blogger points to the March 2008 Commonwealth Transportation Fund Revenue Report , which indicates that the Motor Fuels tax in Virginia increased 4.4 percent in March. Something seems out of sync. Perhaps the difference between U.S. and Virginia trends can be attributed to differences in what is being counted or in methodology.
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