Sunday, March 27, 2011

The CBO is 'Driven'


"About 25 percent of the nation’s highways, which carry about 85 percent of all road traffic, are paid for in part by the federal government; the remaining funding for highways comes from state and local governments.

Federal spending on highways is funded primarily by taxes on gasoline and diesel fuel, but those and other taxes paid by highway users do not yield enough revenue to support either current federal spending on highways or the higher levels of spending that have been proposed by some observers.

Although raising those taxes would bring in a larger amount of revenue, a more fundamental issue would remain: By themselves, fuel taxes cannot provide a strong incentive for people to avoid overusing highways— that is, to forgo trips for which the costs to themselves and others exceed the benefits.

This study examines broad alternatives for federal funding of highways, focusing on fuel taxes and on taxes that could be assessed on the basis of the number of miles that vehicles travel."

So begins the Congressional Budget Office's "Alternative Approaches to Funding Highways", March 2011's 38-page report.

Yes, in an effort to get 'money from somewhere because we're spending it everywhere', the CBO is studying options on how to fund highways.  This is a good thing.  I'm all for finding alternative sources of revenue from 'everyone' vs. continually focusing on the  'wealthiest Americans'.   

Let's dig a bit deeper into the report, shall we?  From the report:

Some policymakers and transportation analysts have expressed interest in developing new sources of funding, for two main reasons.

One is that, over fiscal years 2008 to 2010, federal spending on highways exceeded the revenues available in the trust fund, and the government supplemented the fund with about $30 billion from the Treasury’s general revenues.

As scheduled increases in federal standards for average vehicle fuel efficiency take effect, dedicated revenues may fall further below spending. The other main reason is that the current taxes do not give highway users an incentive to consider all of the costs their use of roads imposes on others; as a consequence, road use exceeds the efficient amount, and the quality of service that users receive from the highway network is lower than it would be otherwise.


Okay, got that?  The Congressional Budget office wants to impose additional taxes on you because:

BOTTOM LINE(S):
  • Increasing gasoline mileage of your vehicle is bad for everyone (although required by 'law')  and,
  • 'you people' had better become aware of the impact that 'your life' is having upon others...  (And while you're at it, would you mind not EATING so much, there are starving children all over the world...)
I don't know about you, but I feel like a CHART is in order!  Hey, look, here's one now...



From the chart above... 
VMT (Vehicle Mileage Taxes, on the Second Line) will 'Significantly' address costs, address mileage-related costs, incur 'High collection costs' AND [Bonus!] produce 'Privacy Issues'

[Because presumably, you'll be required to buy something to slap in your car to track your mileage.  This would be like being required to BUY healthcare based upon your mere 'Existence'.  Not that it's un-Constitutional, or anything...]


Just out of curiousity, what are the sources of revenue to Tax Receipts for the Highway Trust Fund in Fiscal 2010?

Cool, a PIE Chart!!!
So, from the chart above, we paid about $34+ Billion in taxes, surcharges, tire charges, etc., to drive from Point A to Point B in Fiscal 2010. 

According to the CBO, what kind of shortfall are we looking at, year over year?   Quoting the CBO Report:

"For example, the FHWA estimates, on the basis of 2006 data, that from 2007 to 2026, total federal, state, and local capital spending would need to average $126 billion per year (in 2009 dollars) to maintain the highway system’s current “performance,” which is defined in terms of average user costs for travel time, operations, and accidents.

By contrast, actual capital spending in fiscal year 2008 was $91 billion.  The estimate reflects the effects of pavement age and economic and population growth and accounts for signs that the road network is under strain today."

Question for you:  What happened to all the 'Shovel Ready Projects' from the American Reinvestment and Stimulus Act?  You remember, the one where you saw a sign similar to the following every sixth mile while traveling on highways across America?

Cost for these signs across America?  $15 Million Dollars
Jobs created?  17
Irony?  Priceless
Source:  Daily Caller
Didn't we, as a Nation, commit something like $863 BILLION to these improvements as part of this 'Shovel Ready' Act? 

So if our federal highway deficit is estimated to be $90 Billion per year going forward, shouldn't we have pre-paid this debt for, um, like roughly the next 9.588888888888889 years?  Hey, it's not my fault, it's a MATH thing.

One can only assume then, that the money went 'somewhere else' and is not available to pay down this debt on our behalf.  Dang, and here I was wishing that I wouldn't have to get an un-Constitutional 'little black box' installed in my Chrysler to track my work mileage.  Well, like one of the guys I worked once told me, "Poop in one hand, wish in the other.  See which one fills up first."  I never shook this man's hand again after this - he always wondered why...

Okay, bottom line (again) is that there was a lot of thought, and money put into this report.  But in the end, it all comes to the same...

Once again, excerpting from the report, this time from page 29: 
Although VMT taxes can do more than fuel taxes to encourage the efficient use of highways, a combination of both can do better still. If there were no fuel taxes, the efficient VMT taxes would be somewhat higher than otherwise, because they would serve to reduce the costs that are directly associated with fuel use as well as those that are more directly related to miles driven.

However, that would be a second-best approach. VMT charges would not provide the best incentive for reducing fuel-related costs because they cannot account for differences in fuel economy among vehicles and thus would not give drivers an incentive to switch to vehicles that are more fuel efficient.
...
Varying VMT Taxes by Location and Time. To account for location and time of use, efficient user charges would not be based on nationwide averages. Instead, they would cost of miles driven under low-volume, uncongested conditions and an additional local or regional charge assessed and imposed as appropriate, particularly during peak travel hours.

Such time-and-place-specific pricing would improve efficiency not only by reducing the delays, schedule uncertainty, and fuel waste associated with congestion but also by reducing demand for additional capacity.

The FHWA has estimated that widespread congestion pricing could reduce by nearly one-third the investment needed to sustain the operational performance and condition of the highway system—an average savings of $41 billion per year (in 2009 dollars).

In addition, other estimates reviewed by CBO suggest that the operational benefits of congestion pricing in reduced delays and fuel consumption could equal roughly $20 billion to $50 billion per year. Thus, the total annual benefits could be roughly $60 billion to $90 billion.
   
So these recommendations, if adopted, would:

  • Create additional tax revenues by taxing BOTH fuel and vehicle useage
  • Incent drivers to purchase more fuel-efficient vehicles (which we saw above was part of the PROBLEM to begin with)
  • Help you decide WHEN you should drive your vehicle (by charging more for travel during 'congested' periods)
  • Save $41BILLION a year in '2009 dollars'
Once again, the friendly folks in your Federal government want to tell you how much you can drive, what you can drive, and when you can drive by punishing your driving behavior.  (This they call 'Incenting' you, as it was referenced above.)

In the end, it's about raising taxes, influencing behavior, and infringing on your rights to, well, 'move about' the Nation freely. 

That "Clink, clink, clink" sound you hear as you lay your head on your pillow at night?  It's the sound of more freedoms being chipped away while you sleep.

After all, it's all about:


Their collection results. 

Not yours. 

Remember the old Beatles' song, "Taxman"? 

Feel free to hum it quietly to yourself now.
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