A Job for the Gas Tax

THE gasoline tax, to most people, typifies the disagreeable and unpopular in tax methods. In my state, Oregon, which originated the tax twenty-one years ago, it has had to carry the handicap of all the things which the word ‘tax’ has come to symbolize. But this useful, beneficial law overcame even that handicap and ranked as the most popular tax measure ever devised until recent abuses, disguised as economic necessities, turned it to uses its originators never contemplated.

Through the wise and sane administration of the gasoline tax law during most of the past twenty-one years, the motorists have provided funds for the gradual expansion of highway transportation facilities — without imposing hardship on any class of road users. But now misuse of the gas tax law threatens its deserved popularity — even jeopardizes the orderly development of state highway systems to meet modern traffic needs.

If America is going to protect its past investment in highways, reduce the staggering annual cost of traffic accidents, and give the motorists the freedom, economy, and safety of travel for which they have always been willing to pay, the gas tax must be restored to its original purpose. Diversion of highway revenues both from gasoline taxes and from motor license fees must be checked. If state legislatures will not halt the practice of their own accord, the people who pay the gasoline taxes and motor license fees can stop it with ballots.

Seven states have constitutional amendments prohibiting diversion, and three more are scheduled to vote on similar measures during 1940. Except in instances where anti-diversion amendments have been combined with other proposals, the popular vote of the people has always approved measures to outlaw diversion. States which have rejected anti-diversion legislation have not put it up to the people as a clear-cut issue.

A better idea of the evils of diversion may be gained by a clear understanding of what the gasoline tax law is. Perhaps the handicap of the name — gasoline tax — has made citizens feel that it is a dull subject, that they can’t do anything about it anyway. But those who have that feeling are wrong on both counts. It isn’t a dull subject, and they can do something about it. But first they must understand its history and its original purpose, and learn how and why it has been misdirected from its original aim.

The practice of measuring road use by gasoline consumption, and adding a few cents to the price of each gallon as the highway fare or road toll, need not have been called a tax at all. It is not a tax in the usual sense. It was termed a tax because that was what the lawmakers who originated the idea in Oregon called it at first, and nobody has since bothered to name it more accurately.

Actually the so-called gasoline tax is not a charge against gasoline at all. It is the per-mile fare which motorists pay for the tracks on which to run their cars. It merely happens that gasoline is a fair measure of road use and it is convenient for the motorist to pay his fare as he buys his gasoline.

The tax paid on a tankful of gasoline is virtually a ticket entitling the motorist to travel whatever distance that amount of motor fuel will propel his car. He pays only according to the distance he travels, and he doesn’t pay when he doesn’t travel. And the average amount a motorist pays each year for the use of the roads is only $36 — about 8 per cent of his annual car-driving costs.

Railroad fares can just as properly be designated a travel tax as highway fares can be called a gasoline tax. In fact, the Interstate Commerce Commission refers to passenger and freight charges on railroads as ‘tariffs,’ which is another word for tax. The Commission also fixes the amounts per mile which railroads may charge for the use of their facilities, under the title of ‘tariffs,’ just as each state fixes the amount per gallon needed to meet the costs for construction and maintenance of safe and adequate highways.

Actually, paying a gasoline tax for the use of roads and streets is not much different from paying fare to ride on a steam railroad. The fare you pay on a train is so much a mile, and includes the use of the tracks, cars, and other facilities owned by the railroad company. The amount you pay for highway travel is based on the use of the tracks or road only, and assumes that you provide your own car.

Once steam trains ran on wooden rails. The transition to the present carefully engineered roadbed and rails paralleled the development of high-speed locomotives and heavier and more comfortable coaches.

Primitive roads surfaced with gravel or stone thick enough to keep vehicles out of the mud were satisfactory for horse-drawn traffic, but roadbuilding standards had to be changed to fit the automobile. The roads which are the most economical, comfortable, and safe for automobiles are designed for motor traffic just as modern rails and roadbed are engineered to carry modern railway coaches and locomotives.

The railroad fares and freight rates have to be high enough to pay for adequate tracks and equipment and to maintain them in a safe condition. The fares people pay for the use of highways, in the form of gasoline taxes and automobile license fees, have to be high enough to provide roads that fit the volume and speed of modern motor traffic and to maintain them in a safe condition the year round. Otherwise traffic outgrows the highways, roads become congested, accidents are frequent, and motorists cannot travel with the safety and convenience to which they are entitled.

Even if all the railroads were publicly owned, as are the highways, passengers would still have to pay fares based on the distance they traveled. Or if all the highways were privately owned, as are the railroads, people would pay a toll or tariff according to the distance they traveled. Indeed, toll roads were once common in this country, but the gasoline tax is a more convenient and equitable method of financing highway travel.

Measuring road use by motor-fuel consumption is about as simple a method as could be devised. Think how annoyingly complicated it would be if motorists had to buy tickets for the distance they expected to travel before starting on an automobile trip. Or think how bothersome it would be if their speedometers were sealed and an inspector collected a certain rate per mile for what the speedometer registered each week.

Whether gasoline taxes are too high or too low in various states (the average state tax is 3.96 cents) depends on the kind and extent of the highway system which the motorists of each state need and can afford to build and maintain. Certainly no one can seriously contend that we have good enough roads or enough good roads. And it should be remembered that the roads composing our present state highway systems, during the past twenty years, were improved to their present condition chiefly out of road-user taxes, leaving revenues from general property taxes for other purposes.

With traffic accidents still taking more than 30,000 lives a year, injuring a million or more people, and causing an economic loss of more than a billion and a half dollars, can anyone say that too much money is being raised for roads?

Public welfare demands that accidents be built out of highways. Traffic necessity calls for relief of overcrowded roads. No one has yet suggested as fair and equitable a method of financing such an urgent task as by a reasonable tariff on travel paid at the motor-fuel pump.

Officials of the Public Roads Administration have pointed out that the biggest job ahead of America today is to provide a system of highways adequate and safe, not only for the present thirty million motor vehicles, but for the fifty per cent increase in motor-vehicle traffic anticipated in the next quarter of a century. The size of the task in money and miles has been fairly well determined by traffic counts, road-use surveys, highway inventories, and economic studies nearing completion in most of the states. It is obvious that, within reasonable limits, gasoline tax and license fee revenues must be high enough to provide urgently needed new highway construction, to maintain the roads in a safe condition, and to build additional facilities as traffic increases. And that means devoting all of the special road-user taxes to highway purposes and to nothing else.

It is not easy for the average citizen to form a correct picture of highway needs. And unless he can obtain a true view he is as likely to condone as to condemn diversion. People who live in sections of the country where a high percentage of the roads are improved to modern standards, and who drive mainly on boulevards and parkways, are unlikely to be disturbed even by large diversions of highway revenues in their states. They do not realize the facts any more than do the people who live on back roads in thinly populated areas and who oppose programs for improving main state highways because they do not have a paved road at their doors.

The facts about highway needs lie somewhere between these two extremes. They were reported to the Seventy-fifth Congress by W. C. Markham, executive secretary of the American Association of State Highway Officials. His report, based on facts compiled by the forty-eight state highway departments, revealed urgent needs totaling $3,664,296,000. The report showed that more than 98,000 miles of main or principal state highways require rebuilding, widening, or relocation in the interest of safety and for relief of traffic congestion. In addition, the various states reported more than 19,000 highway bridges on main roads to be either too narrow or too light to carry modern traffic safely. A number of these bridges in various states actually have collapsed under traffic in recent months.

An examination of highway income shows that a total of about $1,300,000,000 is collected annually by the states presumably for highway purposes. Ninety per cent of this income is derived from gasoline taxes, motor registration fees, and motor-carrier taxes. But in the face of these urgent needs we see some $160,000,000 of highway revenues diverted annually to uses in no way related to roads.

This practice of diverting highway revenues away from roads was spawned in the deepest swamps of the depression, when ordinary tax revenues were greatly reduced. It has since spread like a plague over the land, with disastrous results. Money was ’borrowed ‘ from highway funds, ostensibly as a temporary emergency expedient. It was done so easily, without eliciting complaints from taxpayers, that many states took diversion as the easiest way out of financial trouble. Then, seeing that motorists as a whole made no loud outcry over being thus short-changed, some states began the bolder and more open expedient of adding a cent or two to the gasoline tax without even the pretense that the money was ever to be used for roads. So long as the motorists were willing to put up with this kind of high-handed financing, there was no need for legislators to rack their brains to devise more fair methods of raising public money.

Now apparently many of the states are in the position of the sorcerer’s apprentice in Goethe’s poem. By observing his master, the apprentice boy had learned a few magic words. One day, during the absence of his master, the lad decided to get out of the daily task of carrying water for the needs of a large household. He commanded the kitchen broom to fetch water, using the magic words he had heard his master utter. The trick worked. The broom carried water until every receptacle in the house was filled. The lad then commanded the broom to stop, but his commands went unheeded. He didn’t know the right words. Frightened because the water was beginning to overflow and damage the house, the boy broke the broom in two. The two pieces continued to carry water — twice as much water as before. By the time the master returned, the house was all but floating away.

Many of the states have found it easier to start diversion than to stop it. It is beginning to dawn on them that even if they enact laws stopping diversion it will require increasingly large expenditures to catch up to the lag in construction and maintenance of their highways caused by diverting road revenues for years. Each year that state highway departments are deprived of needed funds, the task of bringing highway systems up to requirements becomes that much more costly.

The power to stop diversion is lying unrecognized in the hands of the people who use the roads. The highways belong to them. In some states they have paid enough to have more and better roads than they now enjoy. But not until the people in general understand the operation of the gasoline tax, and the direct damage done to highway development by diversion, are they likely to be aroused sufficiently to force action.

Right now, in 1940, when the condition of state highways in the nationaldefense network is a matter of concern, one effect of diversion is being felt. Some of the states are pleading lack of highway funds to explain why roads which the Army has designated as of vital importance to national-defense plans have not yet been brought up to the standard of strength, width, or alignment advocated by the Army General Staff and the Public Roads Administration. This is significant, perhaps, when it is realized that the amount of highway revenues diverted in any single year for the past decade would modernize hundreds of miles of roads which are important to America’s system of highway transportation.

So the first step toward stopping diversion is for the state officials to make public, in layman’s language, all the facts as to highway needs revealed by the highway planning surveys. Then the citizens will see why all highway revenues should be devoted to roads — will realize why in some states present gasoline tax rates are not adequate to do the required job of highway improvement. Then they will insist that the gasoline tax law be allowed to operate as its originators intended — as a means of financing highway construction and maintenance. Really a simple remedy for a complicated problem. But it will work.