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Highway Lobby Frets as Gas Tax Revenues Fall

Consumers driving less, taking more trips on public transit

June 19, 2008

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If America's love affair with the automobile isn't over, it certainly appears to be cooling, as consumers drive less, turn to more fuel-efficient vehicles and take public transit more often. And that is not good news for the government agencies that rely on gas tax funds.

Already, the highway lobby and the government agencies that depend on it are beginning to make noises about the need for new funding sources and, perhaps, higher gas taxes.

As a press release from U.S. Transportation Secretary Mary E. Peters put it: "At a time of record-high gas prices and a corresponding surge in transit ridership, Americans are driving less for the sixth month in a row, highlighting the need to find a more sustainable and effective way to fund highway construction and maintenance."

Americans drove 1.4 billion fewer highway miles in April 2008 than at the same time a year earlier and 400 million miles less than in March of this year, according to government figures.

In addition, vehicle miles traveled on all public roads for April 2008 fell 1.8 percent compared with April 2007 travel. This marks a decline of nearly 20 billion miles traveled this year, and nearly 30 billion since November.

Meanwhile, the American Public Transportation Association counts 2.6 billion trips on public transportation in the first three months of 2008, almost 85 million more trips than last year for the same time period.

"We're burning less fuel as energy costs change driving patterns, steer people toward more fuel efficient vehicles and encourage more to use transit. Which is exactly why we need a more effective funding source than the gas tax," Peters said.

As Americans drive less, the federal Highway Trust Fund receives less revenue from gasoline and diesel sales --18.4 cents per gallon and 24.4 cents per gallon, respectively, she said.

Peters noted that data show midsize SUV sales were down last month 38 percent over May of last year; car sales, which had accounted for less than half of the industry volume in 2007, rose to 57 percent in May.

Past trends have shown Americans will continue to drive despite high gas prices, but will drive more fuel-efficient vehicles consuming less fuel.

"History shows that we're going to continue to see congested roads while gas tax revenues decline even further," said Peters.

"As positive as any move toward greater fuel efficiency is, we need to make sure we have the kind of sustainable funding measures in place to support needed highway and transit improvements well into the future," said Acting Federal Highway Administrator Jim Ray.

Transit's needs

While Peters may be right that the need for road-building and maintenance will continue as Americans change their driving habits, there's also an argument to be made for increased funding for public transit, so that consumers have more travel choices.

"There's no doubt that the high gas prices are motivating people to change their travel behavior," said American Public Transportation Association president William W. Millar. "More and more people have decided that taking public transportation is the quickest way to beat the high gas prices."

Last year consumers took 10.3 billion trips on U.S. public transportation – the highest number of trips taken in fifty years. In the first quarter of 2008, public transportation continued to climb and rose by 3.3 percent.

Light rail - modern streetcars, trolleys, and heritage trolleys - had the highest percentage of ridership increase among all modes, with a double digit 10.3 percent increase for the first quarter.

Light rail systems showed double digit increases in many cities: Baltimore was up 16.8 percent; Minneapolis was up 16.4 percent; St. Louis gained 15.6 percent; and San Francisco was up 12.2%. New Orleans' light rail system – still recovering from Hurricane Katrina – logged a 476% increase in ridership.

Commuter rail posted the second largest ridership increase at 5.7%. The six commuter rail systems with double digit ridership growth rate in the first three months of 2008 were located in the following areas: Seattle; Harrisburg, PA; Oakland, CA; Stockton, CA; Pompano Beach, FL; and Philadelphia.

Heavy rail, including subways and elevated trains, increased ridership by 4.4%. Staten Island, NY had the largest gain, at 12.3%. Bus ridership saw an increase of two percent nationwide, with all sized communities showing increases.

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