There was an article in the LA Times recently about the federal highway trust fund. It is projected to take in less revenue this year as the number of highway miles traveled in the US is expected to drop. Upon re-reading the article, I get the feeling this is really misleading:
As motorists cut back on their driving and buy more fuel-efficient cars, the government is taking in less money from the federal gasoline tax.
The result: The principal source of funding for highway projects will soon hit a big financial pothole. The federal highway trust fund could be in the red by $3.2 billion or more next year.
The federal tax on gasoline is $0.184 a gallon. In 2007, the article shows US gasoline consumption of 9.29 million barrels per day (a barrel is 42 gallons). The estimate for 2008 is not spelled out, but the 2009 estimate is 9.25 million barrels per day and looks higher than 2008. So, let’s just estimate that 2008 usage is 100,000 barrels per day less than 2007. That is 4,200,000 gallons per day less, or $772,800 a day less, or approximately $282.3 million for the year. How does that translate into a $3.2 billion shortfall?!?
There is some other reason (perhaps mismanagement??) that is causing this shortfall – it is not due to the drop in gasoline usage. In fact, there should be space for another 10% drop in usage (close to $3 billion less revenue) before the fund really should be hurting, if not for whatever other factors are causing the current shortfall.
There is something else going on here, as the gas tax should only have brought in $26.2 billion last year. So there has to be some other source of funding to the trust fund, as the article states that $40 billion of projects are slated for next year. That makes this article’s conclusion that the drop in revenue from the gas tax is hammering the trust fun VERY misleading.
However, increasing the gas tax $0.016 to $0.20 should help solve this shortfall, adding almost $2.3 billion based on 2007 usage. I really doubt that any politician would touch that in a political year, though!
A few posters on the oil drum talk about peak asphalt, and I am beginning to believe that too. If construction costs are going up and the money to do road work is disappearing, then the road system of this country is facing a long period of neglect.
