Cheap Gas Is a Thrill, but a Costly One

[cpzilliacus]

N.Y. Times: Cheap Gas Is a Thrill, but a Costly One

The price of gasoline just keeps dropping. A gallon of regular costs $2.01, on average, across the United States, and the motor club AAA says it is likely to plunge below $2 imminently. If you drive a car, as I do, gas that cheap is a thrill. It is an inducement to head out on the road.

Yet if you worry about fuel emissions and climate change, as I also do, the downward spiral of gas prices is frightening. It is an incitement to burn fossil fuel when a great deal of evidence suggests that we should be taking strenuous measures to burn much less of it, as many nations of the world concluded at the conference on climate change in Paris this month.

[froggie]

Without even getting into the environmental debate, if there was ever a time to raise the gas tax, now is it.

[jeffandnicole]

Without even getting into the environmental debate, if there was ever a time to raise the gas tax, now is it.

This argument has been made whenever gas has dropped by 20 cents or more.

Taxes of any type should never be raised simply because other costs have gone down...which generally speaking are temporary in nature.

[froggie]

However, when gas prices are low, drivers don't notice cost increases nearly as much as when they're higher.  And your comment does nothing to address the point that transportation is drastically underfunded in this country and the gas tax is as close to a well-established user fee as we've got.

If anything, your tone suggests that you don't think we should raise the gas tax.

[Brandon]

Costly thrill?  Maybe in the insular environment in New York City.  Out here, it's considered a boon, and a chance to use that money to pay off bills.

[AlexandriaVA]

The rises and falls aren't really that much of a windfall or burden for me, largely due to fuel efficeint and my personal VMT. I think this is also true of other in the northeast.

As usual, and as I've increasingly observed, the effects of these changes are in a large part a function of geography.

[Pete from Boston]

Without even getting into the environmental debate, if there was ever a time to raise the gas tax, now is it.

This argument has been made whenever gas has dropped by 20 cents or more.

Taxes of any type should never be raised simply because other costs have gone down...which generally speaking are temporary in nature.

At the very least this is the time to index the gas tax properly to inflation. However, the hysterics that result from even that reasonable proposal continually doom it.

The last time such a thing was rolled back here, last year, the argument was that politicians should not get a free tax hike without having to vote on it and be accountable.  None of the opponents objected to the people getting a free tax cut and therefore a reduction in real transportation funds without having to vote on it, which is what happens when inflation rises against a static tax.

[jeffandnicole]

Even better reasons why not to raise it now. When prices go back up, will the tax be eliminated? Does it make it any easier to pay then? What will the tax money be used for? Better roads, or bicycle trails? Do we raise the Fed taxes so money from NJ can be used for highway expansion in Montana, or does NJ raise their individual taxes so money can be used in NJ.

My tone has nothing to do with raising or not raising the gas tax. My tone was very clear: now is not the time to raise the tax, because the only thought that went into it is "gas prices are cheap".

[Pete from Boston]

My point is that it is way behind time to index the gas tax to inflation. This is just one of the reasons why we are failing to fund via gas tax what gas tax was able to fund in years past.

The discussion in the oil and gas prices thread should make it very clear that inflation has a frog and frying pan effect.  It does not feel like a dollar has lost a third of its value since the end of the 90s, but that is what has happened, and our gas tax fails to account for this change.  Now is the time to undo the steady gas tax decrease, because so was yesterday, and so was ten years ago.

[Rothman]

I like Pete's idea of finally tying the gas tax to inflation again.  It's beyond due, so take advantage of the current prices now to implement something that has been needed for years.

[Buffaboy]

Without even getting into the environmental debate, if there was ever a time to raise the gas tax, now is it.

I 100% agree with this. Every time I turn around here we hear about highway projects that cost too much or aren't feasible. Well if the gov't could fund the studies necessary to build these projects and then create them, that would do a lot.

If it's a heavy tax (i.e. half a dollar), it may also help people balance their use of both cars and public transit.

[realjd]

My point is that it is way behind time to index the gas tax to inflation. This is just one of the reasons why we are failing to fund via gas tax what gas tax was able to fund in years past.

The discussion in the oil and gas prices thread should make it very clear that inflation has a frog and frying pan effect.  It does not feel like a dollar has lost a third of its value since the end of the 90s, but that is what has happened, and our gas tax fails to account for this change.  Now is the time to undo the steady gas tax decrease, because so was yesterday, and so was ten years ago.

Alternately: make it a percentage of the cost instead of a fixed amount per gallon. That eliminates any inflation issues.

As alternate fuel vehicles become increasingly common though, we're going to have to find a different way to fund our roads.

[US 41]

Actually the government (state and federal) needs to stop raising taxes and make wiser decisions with the money they currently receive in taxes. 

There's plenty of money available for road projects already. I won't get into details, but we all know there are plenty of departments that the government should and could cut.

[noelbotevera]

Why hasn't the idea of solar cars ever caught on? I'm pretty sure it's possible to make a feasible family car without it costing quadrillions of dollars. If it's night, then there should be a system to store energy for the car to use. Problem solved, but hey, easier said than done.

[Rothman]

Actually the government (state and federal) needs to stop raising taxes and make wiser decisions with the money they currently receive in taxes. 

There's plenty of money available for road projects already. I won't get into details, but we all know there are plenty of departments that the government should and could cut.

Federal and state governments already carve out dedicated funds for DOTs.  Granted, especially on the state side, such funds can get raided.  Still, the funding mechanisms already exist.

That all said, I have to say that your statement is made out of ignorance of the state of transportation funding.  Earlier this year, NYSDOT performed a thorough analysis of how much funding it would take to keep conditions steady.  I believe the answer was around $28B.  How much did NYSDOT get authorized to use by DOB?  I believe about $17B (five years).

You can't just argue away a $10B shortage by saying that government just needs to cut this and that.  There is no other way to look at this than a ridiculous under-funding of NYSDOT's capital program.  NYSDOT's funding scenarios are now all geared towards keeping the condition decline as slow as possible.  From what I know, pavements are especially going to get worse as NYSDOT focuses on keeping bridges from falling down.  I've also heard some managers say that the time is coming near for when we're going to have to close down significant links in our transportation system due to them simply being unsafe.

Capital investment simply needs to increase in order to get out of this situation and maintain conditions.  There's no other way around it.

And you had better bet your bippy that this is all personal opinion.

[realjd]

Actually the government (state and federal) needs to stop raising taxes and make wiser decisions with the money they currently receive in taxes. 

There's plenty of money available for road projects already. I won't get into details, but we all know there are plenty of departments that the government should and could cut.

What spending do you propose we cut and reallocate to roads? Please be specific. We don't actually all know which government departments you think are a waste.

[AlexandriaVA]

He probably heard stories in his local news of state employees padding overtime or something like that. Let me tell you something...anything that adds up to anything less than several million is meaningless, the difference in rounding up or rounding down.

Start talking in terms of tens of millions, or preferably hundreds of millions and billions, and you'll start to be onto something.

[AlexandriaVA]

Actually the government (state and federal) needs to stop raising taxes and make wiser decisions with the money they currently receive in taxes. 

There's plenty of money available for road projects already. I won't get into details, but we all know there are plenty of departments that the government should and could cut.

What spending do you propose we cut and reallocate to roads? Please be specific. We don't actually all know which government departments you think are a waste.

We already know the answer. He wants the cuts to take place to any departments that aren't personally important to him, and have the spending reallocated to a department he cares more about (in this case roads).

[Brandon]

Why hasn't the idea of solar cars ever caught on? I'm pretty sure it's possible to make a feasible family car without it costing quadrillions of dollars. If it's night, then there should be a system to store energy for the car to use. Problem solved, but hey, easier said than done.

You need a very light, small car for it, and then there's this little problem with sunless days, especially those which have things like snow or heavy rain.  That's why they race them in the Australian desert.

[Pete from Boston]

Actually the government (state and federal) needs to stop raising taxes and make wiser decisions with the money they currently receive in taxes. 

There's plenty of money available for road projects already. I won't get into details, but we all know there are plenty of departments that the government should and could cut.

How about first making sure the gas taxes we passed are actually the gas taxes we have? 

The problem is that this is such a political electric fence that it was not addressed twenty years ago when fixing it was a less bitter pill.

The Federal gas tax alone has gone down 40% since 1993 just by staying still.  You may say there's enough money, but a) it's not the amount that was passed, and b) it will continue drying up as inflation takes its bite.  (I have not even touched the effect of fuel efficiency on gas tax.)

The cost of transportation has not been going down; why should the user fee we pay for it have decreased for twenty-two years?

[US 41]

If you don't think the government wastes money than you're not paying attention. We aren't 18 trillion in debt because the government is spend taxpayer money wisely. Tolling interstates would be an option that more and more people are starting to support. Only idiots think high speed transportation is free. Interstates cost the most to maintain, so they should be tolled. Sorry but Mexico is right in this case.

Here's some money we could've spent on something important, but instead it was wasted. Spending 27 million to teach Moroccans pottery is not wise spending. It doesn't even help America.

* The government spends about $100 million every four years to subsidize parties at the political conventions.
*The Department of Agriculture spent $2 million to fund an internship program. The program hired one full-time intern.
*Last year, $120 million was paid to dead federal employees.
*A total of $146 million was paid for federal employees to upgrade their flights to business class.
*The government spent $2.6 million to encourage Chinese prostitutes to drink more responsibly.
*The Department of Health and Human Services provided an $800,000 subsidy to build and IHop in Washington, D.C.
*The National Institutes of Health has given $1.5 million to Brigham and Women's Hospital in Boston to study why "three-quarters"  of lesbians in the United States are overweight and why most gay males are not.
*During 2012, $25,000 of federal money was spent on a promotional tour for the Alabama Watermelon Queen.
*The U.S. government spent $505,000 "to promote specialty hair and beauty products for cats and dogs"  last year.
*NASA spends close to $1 million per year developing a menu of food for a manned mission to Mars even though it is being projected that a manned mission to Mars is still decades away.
*Over the past 15 years, a total of approximately $5.25 million has been spent on hair care services for the U.S. Senate.
*The U.S. government spent $27 million to teach Moroccans how to design and make pottery in 2012.
*During fiscal 2012, the National Science Foundation gave researchers at Purdue University $350,000. They used part of that money to help fund a study that discovered that if golfers imagine that a hole is bigger it will help them with their putting.
*A total of $10,000 of U.S. taxpayer money was actually used to purchase talking urinal cakes in Michigan.
*Vice President Joe Biden and his staff stopped in Paris for one night back in February.  The hotel bill for that one night came to $585,000.
*The U.S. Department of Agriculture has spent $300,000 to encourage Americans to eat caviar produced in Idaho.
*The National Institute of Health recently gave $666,905 to a group of researchers that is conducting a study on the benefits of watching reruns on television.
*The National Institute of Health also spent $592,527 on a study that sought to figure out once and for all why chimpanzees throw poop.
*The federal government spent $750,000 on a new soccer field for detainees held at Guantanamo Bay.
*The IRS spent $60,000 on a film parody of Star Trek and a film parody of Gilligan's Island.
*Last year, the federal government spent $96,000 to buy iPads for kindergarten students in Maine.
*The U.S. government spent $200,000 on "a tattoo removal program"  in Mission Hills, Calif.
*Last year, the government spent just under $1 million posting snippets of poetry in zoos around the country.
*The U.S. Air Force Office of Scientific Research spent $300,000 on a study that concluded the first bird on Earth probably had black feathers.
*The federal government spent $75,000 to promote awareness about the role Michigan plays in producing Christmas trees and poinsettias.

[AlexandriaVA]

Many of those things that you listed may be unimportant or irrelevant to you, but are very important to those who benefit from or receive the funding. I won't get into the issue relating to the fact that many of those figures are probably not accurate as well.

Again, many would argue that the Interstate system is itself government pork of the worst degree. Consider Interstates that probably aren't justified based on passenger load or projected demand.

[Pete from Boston]

If you don't think the government wastes money than you're not paying attention. We aren't 18 trillion in debt because the government is spend taxpayer money wisely.

No one said they didn't think this.  You are starting into a new line of discussion on your own.

Tolling interstates would be an option that more and more people are starting to support. Only idiots think high speed transportation is free. Interstates cost the most to maintain, so they should be tolled. Sorry but Mexico is right in this case.

Completely separate point from whether funds are wasted.  Not sure I follow your logic here.  Gas tax is a user fee on all roads that has closely followed a fair model for a long time.  Efficient vehicles are changing this, but it doesn't exempt users of non-toll roads. 

Most importantly, the choice of tolls versus gas tax has absolutely zero to do with whether money is spent wisely.

Here's some money we could've spent on something important, but instead it was wasted. Spending 27 million to teach Moroccans pottery is not wise spending. It doesn't even help America.

(Unattributed, carefully crafted list of context-free anecdotal examples snipped)

Ok, you don't agree with spending on many programs.  Can we talk about roads now?

[J N Winkler]

A few observations:

*  The main reason we have $18 trillion in debt is that it is cheap to borrow.  In terms of infrastructure, it is fiscally sensible to borrow to build if the annualized rate of return is significantly higher than the interest rate.  (We arguably should not be borrowing to fund recurrent expenditures, but general budget policy is well adrift of the main topic of this thread.)

*  Besides indexation for inflation--which won't have much of an effect at present because the inflation rate is so low--the base fuel taxes have to go up radically.  The consensus in the dying days of the Bush administration, which has not been acted on under Obama (for reasons that are not altogether his fault), is that the gas tax needs to be tripled to meet identified needs for upkeep and capital expansion.

*  In regard to the "half a dollar" suggestion for the gas tax, in many states the aggregate of federal, state, and local taxes on fuel are over half a dollar per gallon.  The marginal rate needs to be even higher just to cover lost purchasing power since the last federal gas tax increase in 1994.

[froggie]

Here's some money we could've spent on something important, but instead it was wasted.

<snip list>

What you talk about here would address the general budget and treasury issues (albeit just a drop in a bucket in a trillion-dollar Federal budget).  But because of how Federal funding is distributed by Congress, it does NOT address transportation spending.  Nor does it address that fact that, for decades, the gas tax has been sold as a user fee that will fully pay for roads (it never has, due to both local road needs and the state/local match requirement).