Road taxes

From time to time, we will see a recurring theme to the effect of “bicyclists don’t pay gas tax so they don’t deserve to use the road”. (for a good roundup of this and other similar issues see bicycledriving.org) There are certain elements of truth to this — bicyclists don’t purchase gas, it’s true. And there’s also an implication that motorist are “paying their way”, but that’s just not true. Gas taxes (and other direct taxes on automobiles) nowhere near cover the costs of building, maintaining, and operating roads. And that’s not to mention the (much larger) costs associated with death/mayhem and pollution impacts on human health and the environment. And none of that is to mention other more intangible costs like defending sea lanes worldwide; and propping up unsavory regimes so that oil can continue to flow freely.

Funding for local roads (the roads that both cyclists and motorists use) are paid for heavily through state and local tax general funds — not user fess like gasoline taxes. Cyclists are paying their way, just like everybody else.

Most/much of the direct user fees that motorists pay do go to fund freeways (limited access highways). These roads are used exclusively (with minor exceptions) by motorists — and yet even then the fees are not high enough, and have to be supplemented from other sources, like general sales taxes.

Specifics vary depending on location but the general theme is similar throughout the US.

What follows are specifics as we do things here in Arizona, and specifically Maricopa County and the Phoenix Metro area.

The HURF

Arizona levies two taxes directly upon motorists and the proceeds are termed the “HURF” (Highway User’s something Fund). The two souces are; motor fuel taxes, and VLT (Vehicle License Tax, a fee paid yearly based on the value of a motor vehicle).

Because the rate on gasoline is levied per gallon, 18.5 cents per gallon, and hasn’t changed since 199?, the amounts available to the HURF have been dwindling.

usgovernmentspending.com has some good charts of, e.g. ARizona state spending broken down in categories like education, police, transportation, etc.

Freeway Sales Tax

Maricopa county levies a 0.25% (check that) 20-year SALES tax to build freeways. First approved in 1985, it was set to expire in 2005 but extended for another 20 years by “Proposition 400″. The split was more favorable to public transit, but still heavily favors freeway spending. The most vociferous opposition came from those who specifically thought that not enough of the money would be used for freeways, and in particular hated that any monies would be spent on light-rail. See e.g. Prop. 400 foe wants to stop light rail., Arizona Republic, Sept 23, 2004.

I note that bicyclists do not ride bikes on freeways (in fact, bicycles are banned from freeways in the metro area).

So, the freeway sales tax is just another externality of automobility — drivers not paying their way.

Background on Federal Tax

The federal levy on fuel is much the same story — it is based solely on a per-gallon charge of 18.4 cents per gallon gasoline THAT HASN’T GONE UP SINCE !993! Of course, the price level has gone up a lot since then, so the amount of real dollars keeps falling. If 18.4 was the “right” amount in 1993, the rate should be raised to ~ 28 cents/gal (2011 dollars). These missing dollars of course still get spent, replace from other sources like general funds; funds that everybody pays, not just drivers.

A minority of the fuel tax funds (about 15%) is spent on mass transit, and 0.1 cents of it is spent on cleanup for leaking underground fuel storage tanks.

Historical gasoline fuel tax rates from Table 1 CRS report:

Rate of Tax in cents per gallon Period to Which Applicable
1.0 June 21, 1932, to June 16, 1933
1.5 June 17, 1933, to December 31, 1933
1.0 January 1, 1934, to June 30, 1940
1.5 July 1, 1940, to October 31, 1951
2.0 November 1, 1951, to June 30, 1956
3.0 July 1, 1956, to September 30, 1959
4.0 October 1, 1959, to March 31, 1983
9.0 April 1, 1983, to December 31, 1986
9.1 January 1, 1987, to August 31, 1990 (a)
9.0 September 1, 1990, to November 30, 1990
14.1 December 1, 1990 , to September 30, 1993
18.4 October 1, 1993, to December 31, 1995 (b)
18.3 January 1, 1996 (c), to September 30, 1997
18.4 October 1, 1997 (d), to March 31, 2005

There are also some excise taxes aimed at heavy trucks — based on the obvious theory that heavier vehicles cause more wear and tear on roads and bridges.

9 thoughts on “Road taxes

  1. Pingback: City Liability @ Arizona Bike Law Blog

  2. Pingback: Sales tax shortfalls delay highway plans @ Arizona Bike Law Blog

  3. azbikelaw Post author

    http://azdailysun.com/news/local/govt-and-politics/not-so-charitable/article_63cc04a8-d9ea-5ef1-8b3e-97c8c46cf150.html
    “The city has been receiving less each year from the state-shared gas tax and other highway user revenues. It peaked at $2.4 million annually and is now about $1 million a year to fix city streets”

    “One reason is a pending shift in city spending priorities to capital needs and potentially away from human services. City staff told the council during the budget retreat that they have identified more than $27 million in deferred maintenance, with a majority of that figure tied to fixing deteriorating streets”

  4. Justin

    http://www.azleg.gov/const/9/14.htm (Constitution of Arizona)
    No moneys derived from fees, excises, or license taxes relating to registration, operation, or use of vehicles on the public highways or streets or to fuels or any other energy source used for the propulsion of vehicles on the public highways or streets, shall be expended for other than highway and street purposes

    Further codified in ARS 28-6533 http://www.azleg.gov/ars/28/06533.htm
    B. The revenues in the Arizona highway user revenue fund shall only be spent for the purposes prescribed in article IX, section 14, Constitution of Arizona. Counties and incorporated cities and towns shall not spend highway user revenue fund monies distributed to them pursuant to this article for enforcement of traffic laws or administration of traffic safety programs[...]

    See also 28-6501 and 28-6991 for a list of sources for the funds.

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