High Gas Prices = Less Gas Sold = Less Tax Collected = Little Money To Repair Roads

Published on July 28th, 2008

Guess it’s time to get used to potholes, collapsing bridges and bumper car drives. Buckle up and switch to 4-wheel drive for the trip to the grocery store!

A report to be released Monday by the Transportation Department shows that over the past seven months, Americans have reduced their driving by more than 40 billion miles. Because of high gasoline prices, they drove 3.7% fewer miles in May than they did a year earlier, the report says, more than double the 1.8% drop-off seen in April.

The cutback furthers many U.S. policy goals, such as reducing oil consumption and curbing emissions. But, coupled with a rapid shift away from gas-guzzling vehicles, it also means consumers are paying less in federal fuel taxes, which go largely to help finance highway and mass-transit systems. As a result, many such projects may have to be pared down or eliminated.

The challenge comes at a time when surging costs for asphalt and other construction materials already are straining state and local transportation budgets. Those cost increases make it more expensive to maintain the nation’s roads, bridges and rail networks.

In many areas, the ragged edges are already showing. About 25% of bridges in the U.S. are either “functionally obsolete” or “structurally deficient,” like the Mississippi River bridge that collapsed in Minneapolis last August, killing 13 people.

[...] Overall, the commission estimated, $225 billion a year is needed to meet the country’s transportation infrastructure needs. Current spending is about 40% of that level.

41 users responded in " High Gas Prices = Less Gas Sold = Less Tax Collected = Little Money To Repair Roads "

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# 1 Improbus said, on July 28th, 2008 at 4:06 am

[sarcasm]

Yes, but the Surge is working!

[end sarcasm]

# 2 Angus said, on July 28th, 2008 at 4:10 am

That’s what happens when you base your tax income on a additional commodity tax rather than an basic income or sales tax. The use of the commodity is variable.

I’d like to see what would happen to tax income if we were smart and decided to ban tobacco rather than “sin tax” it.

# 3 PeterR said, on July 28th, 2008 at 4:13 am

This should be self-adjusting: crappier roads = more SUVs sold = more gas consumed = more tax revenue = more road repairs.

When the roads have been repaired, people will no longer need 4×4 vehicles to drive on them so they’ll switch to cars with lower consumption and the cycle will start again…

# 4 the answer said, on July 28th, 2008 at 4:30 am

So take the money from somewhere else. If your giving stimulus checks and $40 coupons for things in a time of war then yeah you should find some cash

# 5 Canadian Vacation said, on July 28th, 2008 at 4:32 am

At least its not like in Canada where they appropriate the gas taxes to “general revenue”.
Little goes towards roads and road repairs.
Here in Canada you fill up your gas tank, pay big dollars to drive to your weekend cottage.
The roads to the lake are just terrible .
They never fix or repair the roads and in effect steal the gas money and tax you to death
Well at least I guess in Canada Micheal Moore says you have “free healthcare”

# 6 Dallas said, on July 28th, 2008 at 4:35 am

Solution is easy. The Fed should send a bill to Americans each year and ask them to choose one.
Pick
(a) US roads, bridges and infrastructure repairs
(b) Iraq black hole, Bush kickbacks and misc
(c) Exempt – send bill to Republicans for Bush

I’ll do the right thing and choose (a) instead of (c)

# 7 it's just an expression said, on July 28th, 2008 at 4:37 am

Believe everything you read = Everything = Why not? + because you heard that cities that previous to high gas prices who weren’t fixing their streets and potholes and bridges are finally now fixing them because there are now bidding wars + cheaper labor = offsets = oh = don’t believe that, news never lies = Trust your news = Trust what they say = alwayssss truuuuust whaaat youuuuu reeeeed

# 8 tcc3 said, on July 28th, 2008 at 4:57 am

my god you’re right expression. Those slick news reports will get you every time. From now on all my news will come from the incomprehensible ramblings of strangers on blogs. Your blend of incomplete sentences and mathematical symbols have shown me the light.

# 9 Todd said, on July 28th, 2008 at 4:58 am

High Gas Prices = Less Gas Sold = Fewer Miles Driven = Road Repairs Needed Less Often = Boring, Inconvenient Facts That Make the Story Dull

# 10 QB said, on July 28th, 2008 at 5:14 am

In Alberta, the infrastructure was pretty much ignored for 14 years while the debt was payed off. Now they are working like mad to fix it and expand long overdue upgrades. The costs are staggering now – over 5 times higher than they should have been.

Gas taxes in the Canada vary by province (after the standard federal excise tax). The provincial government is also responsible for infrastructure. I think you have your target Canadian Vacation.

# 11 Todd Henkel said, on July 28th, 2008 at 5:22 am

#2 – Income and sales taxes are variable too.

This is another reason that a gas tax “holiday” is a dumb concept out of either party.

# 12 pedro said, on July 28th, 2008 at 5:22 am

This is excellent news!!! Once the streets are full of potholes & in poor conditions, the illegals will run out into Canada ’cause US will be like their homes.

Then again, this might backfire because seeing the crappy roads, illegals will feel right at home.

# 13 Ben said, on July 28th, 2008 at 5:25 am

Less driving = less wear on the roads.

# 14 Ducky said, on July 28th, 2008 at 5:41 am

The title should have been modified as:

High Gas Prices = Less Gas Sold = Less Tax Collected = Little Money To Repair Roads = Less people driving on said roads = Lower gas prices = More Gas Sold = More Tax Collected = More money to repair roads = High Gas Prices…

Remember — Changes in demand causes the price to go up AND down. It’s never a one way street.
Remember how lots of gasoline producers expected the usual summer demand and found they got an excess inventory of gas, which drove the prices down?

# 15 Ron Larson said, on July 28th, 2008 at 5:48 am

They must have some mighty fine roads and bridges in Iraq now considering how much money we are dumping there.

# 16 Peter iNova said, on July 28th, 2008 at 6:07 am

Higher gas prices = less gas sold = less vapor escapes = less pollution = lower cancer rate from volatile hydrocarbons = longer average lifespan.

Higher gas prices = less money available to buy guns = lower crime rate = lower NRA membership dues = lessened political support for second amendment rights = more strident gun laws = fewer guns available to protect against home invasions = more emboldened home invasion criminals = higher crime rate = greater chance of being killed in a home invasion robbery = greater expenditure on security systems = greater consumption of security guard vehicle fuel = greater taxes collected = more powerful government = police state with lower life expectancy.

Higher gas prices = less disposable income = tighter home budgets = fewer car trips = greater TV viewing = fatter couch potatoes = lower birth rate = fewer children = end of civilization as we know it.

Higher gas prices = greater energy consumption awareness = public outcry to stop dicking around doing nothing the way we have been on the energy issues the way we have been since the oil crisis of the 1970’s when we first chose to ignore our clear and present wake up call.

Higher gas prices = bad = good = but not neutral = source of spin into numerous dimensions depending on which ax to grind you wish to exploit.

“What are you rebelling against, Johnny?”
“Whadda ya got?”

# 17 GigG said, on July 28th, 2008 at 6:15 am

High Gas Prices = Less Gas Sold = Less Tax Collected = Little Money To Repair Roads = Less Wear On Roads

# 18 Cap'nKangaroo said, on July 28th, 2008 at 6:19 am

this is an old problem that now gets a “new” cause. spending to maintain roads and bridges has always been short of the actual needs. previous administrations (both Rep and Dem) would hold back money and let the Highway Trust Fund (gas tax, special taxes on vehicles and tires, etc) grow to offset spending in other non-highway areas.

the current administration has been pushing “public/private partnerships” as the solution for the upkeep of current roads and for new highways. it is all about selling infrastructure to raise money for new construction and ongoing maintenance (Chicago Skyway, Indiana toll road). Pennsylvania is seriously considering charging tolls on I-80 and North Carolina keeps talking about doing the same to I-95. this way the states unload a large portion of highway upkeep but still collect the gas tax at the pump. you get to pay once at the pump and again at the toll booth.

and let us not forget the swag the politicians will collect from the new owners of what used to be public infrastructure. they made out like the bandits they are from the land developers on the route of the highway, again from the construction companies to build it, and now from the lobbyists for the international companies that want to buy/lease it.

# 19 JimR said, on July 28th, 2008 at 6:19 am

Actual equation…
High gas prices = more taxes + obscene profit = even more taxes

Transportation Department is FOS.

# 20 Mr. Fusion said, on July 28th, 2008 at 7:10 am

Complete bullshit.

Almost every road problem has been a long time in the making. None of them became critical all by them self in less than a year.

Second, heavy trucks cause more road damage than do the cars. Current road construction is damaged very little, if at all, by cars.

Third, car (gasoline) taxes have been subsidizing road repair done by the trucks. Maybe it is time for the trucks to actually pay for the damage and upkeep.

# 21 Paddy-O said, on July 28th, 2008 at 7:41 am

“High Gas Prices = Less Gas Sold = Less Tax Collected =…
“Guess it’s time to get used to potholes, collapsing bridges and bumper car drives…”

That’s not the problem. The problem has ALWAYS been throwing the highway funds (state & nat level) into the general fund. If the $ had only been spent on highway infrastructure there would be NO problem today.

# 22 MikeN said, on July 28th, 2008 at 7:48 am

So raise the gas tax. Better yet, repeal most of the gas tax, and let the states figure out how to repair the roads.

# 23 MikeN said, on July 28th, 2008 at 7:49 am

The push for hybrids and other non gas based cars will lead to monitoring of driving and taxing based on mileage. Way to go, advocates of privacy!

# 24 Mr. Fusion said, on July 28th, 2008 at 8:09 am

#22, Lyin’ Mike,

I thought user fees were the hallmark of conservative politics. It is with health care.

# 25 Dr Dodd said, on July 28th, 2008 at 9:03 am

Poor, poor government can’t fix the roads. With the trillions they get every year they still discover reasons to raise our taxes.

I bet that if the billions and billions allocated on wasteful pork projects was transferred to roads there would be more than enough.

But then the poor, poor politicians wouldn’t get credit for their pet projects and isn’t that what it’s really all about?

# 26 MikeN said, on July 28th, 2008 at 9:19 am

@23, my bad, I meant repeal the federal tax, and let the states pass their own gas taxes. It’s not a big change since state taxes are higher, but I would drop 15 cents of the federal 18.4, and maybe all of it.

# 27 MikeN said, on July 28th, 2008 at 9:21 am

Off topic, but how about we let any gas car that meets European standards be automatically allowed for sale in the US? GM and Ford sell cars in Europe, but they don’t sell them here, partly because it’s expensive to change them for US regulations.

# 28 Scott said, on July 28th, 2008 at 9:56 am

The implicit argument is that all of this happened quite suddenly. As if the number of miles driven, the tax revenue decline, and the need to repair bridges and the like all occured at the same time.

In truth, bridges and roads have been in bad repair for years. When revenues were plentiful and the economy doing well, it makes more (political) sense to build new roads than it does to repair existing ones. This is the same logic that says it is better to convert farm land to housing while letting city centers rot away.

If the decision makers had instead chosen set as a priority to maintain existing infrastructure before building anything additional, this problem would vanish, more productive land would be available to produce food, and downtown redevelopment would not be needed.

Ignoring all of that they now excuse the poor state of the roads and bridges on a recent decline in revenue.

# 29 Grandpa said, on July 28th, 2008 at 10:02 am

I’ve said it once and I’ll say it again: You can’t send hundreds of thousands of good paying jobs overseas without creating a recession.

The rich traitors in Washington want us to work for less. Do you really think millions of illegals are here by mistake?

# 30 Pmitchell said, on July 28th, 2008 at 10:25 am

there is plent of money to fix the highways our govt just blows it and steals it from the highway fund not to mention the huge waste of money light rail and hov lanes are

just stop wasting my tax dollars on the 100million dollar a mile light rail in houston and you can fix one hell of a lot of roads

# 31 lou said, on July 28th, 2008 at 11:11 am

Nothing to worry about. W will just put it on the credit card.
Call Bernanke and get the bond printer going.

# 32 RSweeney said, on July 28th, 2008 at 11:34 am

Not to let facts get in the way of a good story, but… the Minneapolis I-35 bridge DID NOT collapse due to lack of repair, but instead due to a hidden design/construction defect there since day one. The bridge was weak by design.

Ironically, it was an infrastructure improvement project that overloaded the deficient bridge resulting in its collapse.

# 33 ECA said, on July 28th, 2008 at 12:10 pm

Ummm,
1. the Gas tax hasnt gone DOWN. its the SAME as it EVER was. its not a percentage, so it DIDNT go up, either.
2. HOW old are these bridges, and roads?
3. in the 90’s there was a study of bridges and roads in the USA…70% of the bridges DIDNT PASS inspection.
4. where did the money go?

# 34 ECA said, on July 28th, 2008 at 12:29 pm

PS.
the AGE does mean something..
As Bridges made 60+ years ago were NOT designed for CURRENT numbers of cars and trucks.

Where did the money GO??
As a president of the past has said.
It costs over 1/2 of the TAX to collect the TAX.
ANd its not just the GAS tax, the transportation TAX and PROPERTY TAX that PAY for roads and maintenance..
THAT is alot of money..
Figure GAS..
1,000,000 gallons per STATE(min.est)
x48 continental states
PER day
x 365
times that by .70(the avg tax for states)
= 12,264,000,000 is the MINIMUM amount in taxes.
and their estimate is 10 TIMES this amount is already being collected??

I will tell you what will happen.
AS THE PRICE of gas goes DOWN…The TAX will soon DOUBLE..
AND..
in the first few years things WILL be done, and then…LEFt to ROT. and the TAx wont go down.

# 35 JimR said, on July 28th, 2008 at 5:49 pm

The price of gas has doubled in a year, therefore the tax revenue per gallon has doubled. Take that 100% increase in fuel revenues and subtract a measly 3.7% drop in gas usage. Net… your gov is taking in 96.5% more tax revenue on gas than a year ago. Get it?

# 36 ECA said, on July 28th, 2008 at 6:13 pm

JIM,
Gas TAX is not a PERCENTAGE in the USA…never has been.
Its a FIXED amount per gallon.

# 37 ECA said, on July 28th, 2008 at 6:16 pm

http://www.api.org/statistics/fueltaxes/

As of July 1, 2008, the average amount of tax imposed on a gallon of gasoline sold in the United States was 49.4 cents per gallon, up 2.4 cents from the January 2008 report. For diesel fuel, the national average amount of tax was 56.4 cents per gallon, up 2.8 cents from the January 2008 report.

# 38 deowll said, on July 28th, 2008 at 6:54 pm

It depends on the way the tax is set up. If it was X cents on the gallon they get less money if less gas is sold but if it was X cents on the dollar how are they getting less money when a gallon costs a lot more dollars? Are people spending less money on gas? I don’t think so.

# 39 ECA said, on July 28th, 2008 at 7:46 pm

The only way they get LESS, is if there is LESS gallons sold.
but it still dont answer the question…
In the last 10-20 years…WHERE IS THE MONEY?

The money from Trucking taxes, Property TAX, HIGHWAY tax and FUEL tax…

# 40 ECA said, on July 28th, 2008 at 8:32 pm

http://www.api.org/statistics/fueltaxes/upload/July_2008_Notes.pdf
Current tax, state and fed.

# 41 BigCarbonFoot said, on July 29th, 2008 at 4:00 am

Do your part. Get in your car and start driving. Move further from work. Make carpooling illegal. Scrap all mass transit.

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