Tired of Hearing that Bicyclists Don't Pay for Roads?

One of the common misconceptions about the source of road funding is that bicyclists don’t pay their share and, therefore, are not entitled to the use of the roads. The people who hold this erroneous view think that the gas taxes they pay not only cover the costs associated with their use of the roads, but that the gas taxes are also used to pay for facilities for bicyclists. The problem with this viewpoint is that gas taxes cover only a small fraction of the total costs that are imposed by the use of motor vehicles.

To cover the full costs of operating a motor vehicle, the gas tax would have increased to more than $3.50. Currently, the Oregon state gas tax is 24¢ per gallon and the federal excise tax is 18.4¢ per gallon. How much more would depend on which “soft” costs were to be covered—pollution cleanup, medical costs, policing, the war in Iraq, etc. The bulk of the funding comes from other sources, including taxes that have nothing to do with the burden that the taxpayer places on the public road system.

Since voters approved a constitution amendment in 2001, the use of the net proceeds from the state gas tax and vehicle registration and title fees after the costs of administration have been limited to highway construction and maintenance—including bike lanes within the highway right-of-way. (Previously these taxes also funded traffic patrols and state parks.) Subsequent efforts to restore funding for policing have failed. The money collected is distributed among the Oregon Department of Transportation (60%), counties (24%), and cities (16%).

Historically, the vehicle registration and title fees were calculated to cover the fixed cost to the public of an individual’s ownership of a vehicle. The gas tax (and the similar weight-mile tax paid by trucks) were intended to cover the variable costs associated with operating the vehicle. However, beginning in 2001, the state legislature initiated a major departure from this funding philosophy. Because an increase in the gas tax was politically difficult and registration and title fees were relatively low, the legislature decided to increase these fees to fund road expansion and repair costs—clearly costs associated with the use, rather than the ownership of vehicles. The fee increases equate to a gas tax increase of 2 - 3¢ per gallon, distributed disproportionately on individuals who drive their motor vehicles fewer miles than the statewide average.

The difference between the cost of $3.50 or more a gallon and the 30¢ or so a gallon actually paid by drivers has to come from someplace, and does. However, the source of the difference has nothing to do with the costs imposed by the operation of motor vehicles.

During the 2007-2008 fiscal year, the City of Salem anticipates receiving about $7 million as its share of the state highway fund. This will not be sufficient to even cover the city’s costs of operation and maintenance of the street system. Another $3 million will come from other sources. The money budgeted for capital improvements, primarily street expansion projects to handle increased motor vehicle traffic accounts for an additional $17 million of the city’s budget. The primary source of these funds is property-based taxes. Thus, only about 25 percent of the money that the city spends on streets is paid through user fees on motor vehicle use. Salem is not atypical. In the Portland area, Metro's budget includes almost $200 million for transportation projects, about 15 percent of which will come from the state highway fund.

Todd Litman of the Victoria Transport Policy Institute (www.vtpi.org) compared costs of providing for motor vehicles and bicycles with the contributions by each of these groups to transportation funding. In Whose Roads? Defining Bicyclists’ and Pedestrians’ Right to Use Public Roadways, Litman concluded that, “Pedestrians and cyclists pay more than their fair share of roadway costs.” Because of the disparity between the relative contributions to support the road system and the costs of providing the services, pedestrians and bicyclists tend to subsidize motorists.

The concept can be hard to grasp because motorists do pay both highway user fees and property taxes. However, consider this example: You and your friend decide to have a barbecue, purchase all of the food, and split the cost evenly. Your friend has a bag of briquettes that he uses in the grill, so he has contributed more to the total cost of the barbecue. But, your friend brings his wife and three children along and among them, they eat 3/4s of the food. Who subsidized the other?

The direct costs of roads do not encompass all of the costs of motor vehicles. The health care costs imposed by motor vehicles are in the billions of dollars. Many employers provide free parking, a benefit that costs the employer money that otherwise would be available for salaries for all workers. The list is endless. So, now, who is receiving the free ride?

I originally wrote this for publication in the September 2007 issue of Spokes, the newsletter of the Salem Bicycle Club.