Have you ever been accused as a bicyclist of not contributing a fair share of road taxes? Has anybody suggested that bicyclists have less right to the roadway, or that investments in bicycle facilities are unfair to non-bicycling taxpayers, because bicyclists don't pay fuel taxes and registration fees? These arguments are wrong, and here is why.
Although fuel taxes fund most highway expenses, local roads are primarily funded through local taxes that everybody pays regardless of how they travel. Of the $31 billion dollars spent on local roads in the U.S., only $10.4 originates from motor vehicle user charges (FHWA, 1994). When divided by an estimated 1 trillion miles driven on local roads this equals about 1¢ per vehicle mile. The rest of local road funding comes from general funds and special assessments.
Residents pays these taxes whether they drive an automobile or ride a bicycle. There is no indication that bicyclists pay less local tax on average than drivers as a class. Only a small portion (probably less than 5%) of bicycling takes place on state and federal highways, many of which bicyclists are prohibited from riding on. Certainly, automobiles impose greater costs on local roads than bicycles impose on fuel-tax funded highways.
Driving imposes much higher costs on society than bicycling. Table 1 shows estimated roadway construction and maintenance costs based on the California Department of Transportation cost allocation formula, indicating that automobiles impose costs of about 3.1¢ per mile driven.
Roadway Cost Allocation Average Cost Per Mile | |
|---|---|
| Automobiles | 3.1¢ |
| Motorcycles | 1.7¢ |
| Pickups and vans | 4.0¢ |
| Buses | 5.6¢ |
| Trucks | 17.5¢ |
Vehicle user charges (fuel taxes and vehicle fees) average about 2.3¢ per mile. These figures indicate that motor vehicle use is subsidized at about 1¢ per mile when averaged over all automobile travel, and more than 2¢ per mile when averaged over local road travel only. These estimates only cover direct roadway costs. Vehicle use imposes other government financed costs including traffic law enforcement and emergency services, tax funded parking subsidies, and the opportunity cost of roadway land. Together these represent an additional government subsidy of driving averaging 3.4¢ per vehicle mile, for a total cost of 6.5¢ per mile. Bicycling is estimated to impose roadway costs of only 0.2¢ per mile.
Driving imposes other costs to society, including congestion, off-street parking facilities, uncompensated accident damages, and environmental impacts. Several major studies estimate that these externalities average 10 to 40¢ per automobile mile (Apogee, 1994; Office of Technology Assessment, 1994; Litman, 1995).
Bicycling, walking and other non-automotive modes impose much lower costs. These costs per mile (or kilometer) figures understate automobile user subsidies since drivers tend to travel by roadway much more than non-drivers in a given period. On average an automobile driver travels on public roads about 15,000 miles per year, while non-driving bicyclists and transit users average a quarter or less of this distance. On a per capita basis, bicyclists pay far more in taxes per mile of roadway travel than drivers.
Example:
Two neighbors have similar incomes and pay equal property and sales taxes. Mike the Motorist drives 15,000 miles a year. Francis Footpower bicycles 3,000 miles and walks 1,000 miles each year on public roads. Table 2 summarizes their road costs and tax contributions.
| Table 2 Road System Cost Distribution | ||
|---|---|---|
| Mike | Francis | |
| General taxes used for roadway services. | $400 | $400 |
| User charges (fuel taxes and vehicle fees). | $300 | $0 |
| Total road system contribution. | $700 | $400 |
| Tax payment per mile of travel | 4.7¢ | 10.0¢ |
| Total annual road use costs* | $975 | $7 |
| Annual financial gain or loss | +$275 | -$393 |
| Payment to cost ratio | 0.72 | 50 |
| * (assuming automobile costs = 6.5¢ per mile, bicycle = 0.2¢ per mile) | ||
Mike pays only $0.72 in taxes for each dollar of costs imposed by his vehicle use, resulting in $275 per year in road system subsidies. Francis pays $50 for each dollar of cost imposed by her bicycling and walking, resulting in a net annual tax overpayment of $393. In addition to these direct government funded expenses, driving imposes thousands of dollars per vehicle annually in other externalities. Some such as accident risk, pollution and the barrier effect are imposed most on non-drivers.
Of course, many people use both automobiles and non-motorized modes, so their overall gains and losses are somewhere between these estimates. However, this example illustrates that households which drive more than average are subsidized overall by households that drive less than average. This is unfair, particularly since lower income households tend to drive significantly less than those with higher incomes. It is also economically inefficient because it removes the incentive for individuals to use the most efficient mode for each trip and reduce their travel needs.
Summary
U.S. drivers pay 2.3¢ per mile in user charges, about 1¢ of which goes toward local roads, but impose direct economic costs on government averaging 6.5¢ or more. The balance is funded through general taxes. Overall, drivers pay less tax than the costs they impose while bicyclists and pedestrians pay significantly more per mile of travel and impose much lower costs. This is unfair and inefficient. Bicyclists tend to receive a smaller share of public resources although they pay for local roadways and services. This discrepancy effectively subsidizes inefficient travel habits, making society overall worse off.
References
Apogee Research, The Costs of Transportation, Conservation Law Foundation (Boston), 1994
1993 Highway Statistics, FHWA (Washington DC), 1994.
Todd Litman, Transportation Cost Analysis, Victoria Transport Policy Institute (Victoria), 1997.
Office of Technology Assessment, Saving Energy in U.S. Transportation, U.S. Congress, 1994
Small; Winston and Evans, Road Work, Brookings Institute (Washington DC), 1989.
Urban Institute, Rationalization of Procedures for Highway Cost Allocation, Trucking Research Institute (Washington DC) 1990.
This is a condensed version of the 11 page report, Whose Roads. For more information on these issues, full citations and figures, order this report or contact the Victoria Transport Policy Institute. The full report is available from the Victoria Transport Policy Institute for $12 U.S. or $16 Canadian, plus GST. © 1995