Highway Funding: Do Roads Pay for Themselves? No Because of “Theft”

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Photo: Emily Metcalf
Photo: Emily Metcalf

BY PANOS PREVEDOUROS – PHD – Here is a brief analysis by Jack Mallinckrodt,  PhD in Electrical Engineering, Stanford University who made U.S. transportation planning his retirement hobby and has developed a series of well thought out articles at his website www.urbantransport.org:

The current intense search for additional sources of highway user revenue is grossly misdirected.

Based on FHWA “Highway Statistics” data for 2004 (typical), “highway user fees”, defined as all tax payments by highway users paid as a “necessary condition of their use of the highway system”, are already yielding revenues of $245 billion/yr (2004).  That’s enough to easily pay the full current annual costs of right-of-way, planning, building, maintaining,  and operating, and financing  the entire U.S. highway system, with a surplus (in business called  a “profit”) of $98 billion/yr.


The fact that they don’t do so is due entirely to:

  1. An arbitrary (not rational) redefinition of “Highway User Fees” hs that counts only about half of the ACTUAL highway user fees paid, and
  2. State and federal politicized congressional misappropriation of those  surplus revenues, (“Diversions) to earmarked political favorites (street cars, bullet trains etc.) that provide little or no congestion reduction capacity at 90 or more times the net the cost per passenger-mile.

As someone might have said: “We don’t have a revenue problem, we have a revenue distribution problem.”. The revenue distribution process is a leaky sieve. The revered “Highway Trust Fund” initiated long ago as a solution to highway funding, with its latter day revisions has become instead, part of the problem.

No conceivable additional revenue collection mechanism, not increased fuel taxes, not tolling, nor mileage charge system, will resolve this funding gap until we fix the real highway fund leakage problem.  Our first priority must be to fix the highway user fee receipt distribution process. Otherwise we will simply be spinning our wheels faster. There is much more to this story, derived and explained in “Highway User Fee Surplus.”