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Reduced driving leads to crummy roads

November 21, 2008

Fewer cars on the road apparently isn't necessarily a good thing. In fact, reduced driving is likely to mean our roads and bridges will deteriorate more quickly.

Isn't that a bit counterintuitive?  I mean, the fewer cars on the road, the less pounding the asphalt takes, right? And that means it's a smoother ride for those fewer vehicles hitting the highways.

Highway1 (2)
But that's not how it works in the real, and tax, worlds.

High fuel costs lead to less driving. That means fewer fill-ups. Which means fewer fuel excise tax dollars collected. And that means a smaller balance in the federal Highway Trust Fund, which pays for major road and bridge repairs.

Highway Trust Fund revenue fell $3 billion in fiscal year 2008 as Americans drove almost 11 billion fewer miles, according to the U.S. Transportation Department. 

Transportation Secretary Mary E. Peters noted that we drove 4.4 percent less, or 10.7 billion fewer vehicle miles traveled, in September 2008 than September 2007. It was the 11th consecutive month of declining driving.

And while the road repair account took a $3 billion hit, DoT officials say federal transportation spending increased by $2 billion.

It doesn't take a math whiz to see exactly what road that calculation will take us down.

Gas taxes across the USA: The The American Petroleum Institute (API), the national trade association for the U.S. oil and natural gas industry, regularly tracks gasoline and diesel fuel tax rates. API's October data shows that the national gas tax average, a combination of federal and state levies, is 48.4 cents per gallon.

The map below gives a good indication of where
gasoline taxes are higher. Red states have combined federal and state gas taxes greater
than, and in some places much greater than, 48.4 cents per gallon. Yellow state taxes are between 40 and 48.04
cents
per gallon. Blue states charge less than 40 cents per gallon.

API_state_gas_taxes_October08

You
can click on the map for a larger version (or here if you're reading via feed; to see a map of diesel taxes, click here).

More details on state fuel tax rates can be found in API's chart (PDF version), which reflects a weighted average for each state. This means that any taxes which can vary across a state's jurisdiction are averaged according to the population of the local areas subject to each particular tax rate.

Lower gas prices, more tax revenue? There is hope, however, that the Highway Trust Fund might get a bit of a boost.

Crude-oil prices have fallen below $50 a barrel, and the average cost of a gallon of gasoline is just over $2. The last time motorists paid less than $2 for a gallon of gas was March 2005, when a gallon of regular cost an average $1.99.

As the prices at the pump increased, we changed our driving behavior. Mass transit and car pooling gained converts. When we had to driver, we hit the road in smaller, more fuel-efficient autos.

Will we keep it up when gas is more affordable? Maybe. Maybe not. If we do, that's better for the country and environment in the long run. If not, then at least the increased fuel purchases will add to the highway repair account.

Regardless of what you drive and the price of gas, it never hurts to squeeze the most miles you can out of your auto, especially in this economy. These 10 tips to help you get better mileage.

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • Thanks for bringing to our attention that less driving has resulted in less tax revenue. I figured it would have gone down , but UI had no idea it would have been by that much. I am really proud of the american people looking to more fuel efficient ways to get around. I am also dismayed that the higher price of fuel is slowly taking away the freedoms we always felt when out on the road taking that american cross country road trip or vacation.

  • the roads in my neighborhood are getting worse every day. this is sad to see.

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