The infusion of money into highways through gasoline taxes and the suburban exodus of the middle class and their adoption of the automobile as the primary mode of transportation profoundly altered the nation’s landscape over the past fifty years. The trend seemed inevitable: America would be a nation of drivers residing in unwalkable, monofunctional neighborhoods far from city centers.
When gas hit four dollars a gallon in 2008, however, something exceptional happened: for the first time in history, the number of miles driven in passenger vehicles dropped. Though fuel prices have declined, the reduction in gas consumption is a long-term trend. Hybrids and small cars are replacing gas-guzzlers; eventually, electric vehicles that use no taxable fuel at all may become the norm.
Although progressive transportation activists hail this decline, they must face the challenge of advocating policies that do not adversely affect the poor, who now live mainly outside of inner cities and rely on cars for access to jobs, food, schools, and services. The first quandary is how to fund desperately needed road improvements while simultaneously pushing for changes that will make mass transit more feasible in suburban areas.
For decades, U.S. transportation policy prioritized the completion of the Interstate Highway System, whose multi-lane freeways now span out across the country like a spider’s web. The program was easy to understand: drivers paid taxes on their gasoline consumption, Washington replenished the Highway Trust Fund, and revenues were redistributed to the states to construct new roads. The system was self-reinforcing: the more people in cars, the more concrete could be laid. At last count, the network was more than 45,000 miles long.
The current decline in car use spells disaster for the Fund. Having already obligated billions to states ready to build new roads and transit systems, Congress in 2008 had no choice but to dip into the general treasury and authorize an $8 billion infusion of income tax revenues to fill the Fund’s emptied coffers. In 2009, facing the same difficulties, the government repeated the action—twice. But Congress has yet to find a long-term way to replenish the Fund. Where will the money come from?
There is no easy answer. In the short term, Congress will likely continue to rely on fill-up money from the general treasury. But the failure of the fuel tax to cover the costs of the transportation system suggests a more general failure: the current system does not meet the needs of a modern America in which rich and poor alike increasingly live in the suburbs.
For fifty years, the idea that a user fee of some sort should lie at the heart of the funding for any transportation project reigned supreme. As a result, this recent switch to income-tax-derived funds is a paradigm shift—and a great opportunity. We can now imagine revenues being raised in a way that would encourage the development of a more equitable and environmentally conscious society less reliant on the automobile.
Washington is mired in debt, but cutting funding for transportation is not an option; the United States spends only 2 percent of GDP on infrastructure compared to 5 percent for most European countries and 10 percent for China. The difference shows in the deterioration of our roads and bridges. A recent study by the American Society of Civil Engineers projects a five-year shortfall of more than $750 billion in the expenditures necessary to maintain today’s ground transportation system.
In the early 1990s, Congress twice increased fuel charges to make up gaps in the system, and that solution beckons again. “In the short-term, the gas tax is the only realistic option,” Robert Puentes of the Brookings Institution told me, citing its current use and the ease with which it could be raised. But most of the political world is against it. In his June 2009 Senate testimony, Secretary of Transportation Ray LaHood said that the White House would “oppose a gas tax increase during this recessionary period,” but provided no clues as to how he would fund his agency.
Yet alternatives are just as difficult to propose during an economic downturn. One option is the vehicle-miles-traveled (VMT) tax, which would charge drivers for their use of the roadways. Key Democratic lawmakers have blasted it as a violation of personal privacy because it would require the installation of satellite-linked GPS units or the imposition of mandatory odometer checks. Another possibility is widespread tolling of the kind already seen along highways in the Northeast, but it is considered politically suicidal to charge people to drive on roads that were once free. Tolls also have the hard-to-manage tendency to increase traffic on other roads nearby. Neither solution would encourage the purchase of fuel-efficient vehicles, in contrast to the gas tax.
Any of these options would raise a political firestorm, but the user fee approach—whether based on gas consumption or road use—remains most attractive because it has garnered support on both ends of the ideological spectrum. Conservatives defend highway spending because it “pays for itself.” Progressives like the ecological advantages of limiting driving by increasing its cost. Raising user fees would reduce the number of cars on the road. New revenue could be used to expand public transit, one of the major objectives of the Left’s transportation policy.
“The U.S. really needs to learn more from the best global experience,” said Michael Repogle of the Environmental Defense Fund in an interview, citing Singapore as a model for American policy. That country’s use of an electronic toll on cars entering downtown has allowed it to reduce traffic congestion significantly since 1975, even as citizens have “increased their motor vehicle ownership by three times.” The city-state has used the funds to expand public transportation to handle 66 percent of intra-island travel, compared with only 40 percent thirty years ago.
For years, New York City has considered implementing a similar congestion charge system that would assess a fee on car owners entering or driving in the central business district south of Manhattan’s 60th Street. Despite criticism that the fee would hurt the poor, middle- and lower-income commuters would be minimally affected because they already have access to an extensive network of cheap bus and rail connections that would only be improved with the help of new funding.
This lesson can be generalized to other cities—rare as they may be—that have a strong public transit system. They are the only places whose urban poor would be the least affected by any reform that emphasizes higher automobile fees. Progressive proponents of user fees, however, overlook a massive demographic shift: the poor have moved out of cities.
In 2006, for the first time, more of the nation’s impoverished families lived in the suburbs than in central cities—not to mention the millions living in sprawling municipalities whose form replicates suburbia in all but name. These people, who lack access to alternative modes of transportation, would be the most penalized by any approach that advocates user fees. Ironically, the federal transportation system’s emphasis on highway construction has produced a car-dependent class whose members cannot afford any hike in commuting costs.
A case in point is Phoenix, Arizona, where sprawling suburbs and a relative dearth of bus and train service force nearly 90 percent of commuters to use their cars—this despite the fact that 16 percent of that city’s inhabitants live in poverty. In contrast, only 33 percent of New York’s population drives to work. In worst-case Arlington, Texas, population 400,000, there is no bus service at all, despite the city’s 10 percent poverty rate.
Places like Phoenix and Arlington are the rule rather than the exception. If it was once accurate to stereotype American poverty as an inner-city phenomenon, it would be completely unacceptable to do so today. National housing and transportation policy has for decades favored extra-urban development, sponsoring investment in highways and giving incentives to homeowners. Those choices have encouraged sprawl; it is no surprise that the poor, looking for new opportunity, have followed the pioneering middle classes that first took advantage of life in the suburbs.
Attractive as they may be to families hoping to escape the desolation of inner-city ghettos, however, suburban landscapes of strip malls and cheap single-family homes are hostile to pedestrians and transit users. Dwellings are out of walking range of offices, retail outlets, and parks, making the use of cars obligatory. Unsurprisingly, public transportation in suburban settings often suffers from low ridership, because it is difficult to make it convenient or accessible in places designed for the car.
Although driving is expensive, millions of poor families have no alternative. Almost 30 percent of the nation’s households have annual incomes lower than $25,000, yet more than 90 percent of Americans own a motor vehicle, at an average expense of $8,000 per year. Any increase in user fees designed to reduce car travel would fall hardest on the budgets of the working class, whose freedom of movement is already limited significantly because of the high cost of transportation.
HOW, THEN, to address the financing of the transportation system without reducing the mobility of the car-dependent poor? Some defenders of mass tolling or a VMT fee argue that Congress could provide rebates for the nation’s poorest families. Experience suggests, however, that the desire for funds will supersede any urge to assist the poor. Existing toll roads—most of them in “progressive” northern states like New Jersey and Pennsylvania—provide no discounts based on income. If these states cannot address this problem, how can we count on a considerably more conservative Congress to do so?
Many progressives argue that user-fee revenues should be redirected to alternative transportation projects in poorly served areas. But could we transform suburbs into places where people have access to public transit and use it? Any significant transformation seems unlikely for one reason: suburban population densities are simply too low to support convenient transit networks, which need a large customer base to fill buses and trains and limit subsidies. The average neighborhood of single-family homes has a population density ranging from 2,000 to 5,000 people per square mile. By comparison, in Santa Monica, California, which has a density of 10,000 people per square mile and high-quality bus service, nearly 80 percent of people drive to work every day; places like New York, with extensive transit use, have much higher concentrations of population. Even a doubling or quadrupling of existing suburban densities and a corresponding increase in transit services would likely persuade only about 10 percent of the population to abandon their vehicles. Although a higher user-fee approach might force some people onto buses and trains, the vast majority would still find their automobiles more convenient for everyday use.
Redesigning the suburbs would take years and lots of money. New or improved public transportation facilities cannot be developed now with funds to be earned in the future. What happens in the meantime? Strong, well-funded programs that invest in infrastructure are imperative if the goals progressives espouse are to be realized.
Extending the use of general funds to finance transportation is a good place to start. The income tax source is progressive, as opposed to the user-fee system, which assumes that the poor should pay just as much as the rich. Progressive taxation provides the federal money for education and affordable housing, and it is the principle underlying expenditures on national defense.
The ability to move freely, like the need for housing and health care, is a basic necessity for every member of a modern society. Framing it as an essential public service could reduce resistance to using the income tax to pay for roads and transit.
Yet the user-fee model is so ingrained in the common understanding of how transportation systems should work that other possibilities are not easy to accept. “It’s not the solution, only because people fear that having to haggle every year for a piece of the general fund means you can never be certain whether there’s money or not,” David Goldberg, communications director for Smart Growth America, a transportation and planning advocacy group, told me. “Relying on it exclusively is very unnerving for people in the transportation field.” However, there is no technical reason why a portion of overall income tax revenues could not be regularly transferred to the Highway Trust Fund and guaranteed over a period of several years.
Because the system is supposed to pay for itself, it is difficult to argue against continuing to appropriate fuel tax revenues back into highways. As long as drivers continue to be the transportation system’s primary funders, it is politically onerous to divert money away from roads and toward transit. Car use is thus reinforced. To make matters worse, the system breaks down when the number of drivers declines. “As our population grows, we’re going to drive less per capita,” says Goldberg, “which means less money into the transportation system.”
Income tax-sourced revenue would address both problems, detaching the system from the tether that binds it to roads projects and breaking from the self-support concept. We won’t see any immediate reduction in driving as a consequence of switching to a non–user-fee system, but we will ensure universal access to transportation even as we expand the potential for government to invest in alternative modes and slowly prepare the country for a less automobile-dependent future.
BUT CHANGES in the funding mechanism won’t be enough to deal with environmental concerns. Although cheap gas and free highways have produced the sprawl that so frustrates advocates of alternative transportation, too many other policies relating to land use and transit provision add to the problem. Laws that limit the construction of mixed-use neighborhoods and instead promote malls and culs-de-sac should be changed. Instead of sending billions of dollars to states to build new, mostly unnecessary, highways every year, Washington should encourage the construction of denser communities that foster public transit. Strip malls should be converted into walkable town centers. Local bus services should be ramped up.
Only after low-income families have ready access to a full range of living choices supported by alternative modes of transportation could fees on car use be increased without hurting those who are already suffering economically. Progressives should not find themselves sacrificing the mobility of the poor today to pay for transportation improvements that won’t provide convenient alternatives to the car for years or even decades to come.
Yonah Freemark is a freelance journalist based in Paris. He writes on transportation and urbanism and blogs at thetransportpolitic.com.