Gas tax doesn't cover cost of roads

Tuesday, October 18, 2011

From an article by Larry Sandler in the Milwaukee Journal Sentinel:

The state gas tax would have to rise 50 cents - a 152% increase, to nearly 83 cents a gallon - to cover road costs that are now being paid through property taxes or other general tax revenue, a new study by University of Wisconsin-Madison researchers say.

The study, commissioned by the environmental group 1,000 Friends of Wisconsin, challenges some common claims about how transportation is funded in this state.

Highway advocates typically contend roads pay for themselves, through gas taxes and user fees. But that's only true of state-owned highways, which account for just 10% of all Wisconsin roads, the study says.

When local roads are included, property taxes and other general taxes cover 41% to 55% of road costs, says the study, "Who Pays for Roads in Wisconsin?" For local roads alone, property taxes paid 83% of costs, or $9.9 billion, over the five-year period that ended June 30, 2008, found the study, which is being released this week.

That comes out to 20% of the average property tax bill, said Steve Hiniker, executive director of 1,000 Friends of Wisconsin. If roads were fully funded by gas taxes and vehicle fees, local governments could afford to cut property taxes and increase services, instead of raising taxes and cutting services, the environmental group said.

"Taxpayers cover costs that should be borne by road users," says the study by UW-Madison's State Smart Transportation Initiative. By forcing local officials to choose between roads and other services, the study says, "Road subsidies push up tax rates, squeeze government services and skew the market for transportation."