Monday, September 29, 2014

Gas Taxes and MPG

Some people say that the gasoline tax is no longer a viable source of revenue for the highway trust fund because cars are getting better gas mileage.  What is the evidence?


Let's play around with statistics on historic gas mileage trends from the EPA:
Appendix B



Car mileage changes over the decade from 1975 to 1985:
1975  13.5 MPG
1985  23.0 MPG
For a 70 % increase in MPG


Car mileage changes over the decade from 2003 to 2013:
2003  23.0 MPG
2013  27.4 MPG
For a 19% increase in MPG


Things to note:
The 1990s were the lost decade for MPG improvement.  Cars in 2003 had the same 23.0 MPG as cars in 1985.
The increase of 17% in the most recent decade was substantially smaller than the increase of 70% in the earlier decade.


So why is it that the gas tax will no longer work because of recent increases in MPG, but the gas tax was still able to work after the much larger increases in MPG from 1975-1985?



Repeating the exercise for Light Trucks:


Light truck mileage changes over the decade from 1975 to 1985:
1975  11.6  MPG
1985  17.5  MPG
For a 51% increase in MPG


Light truck mileage changes over the decade from 2003 to 2013:
2003  16.7  MPG
2013  19.7  MPG
For a 18% increase in MPG


Light truck MPG actually fell over the lost decade of the 1990s.
An increase of 18% in the recent decade, vs. a much larger increase of 51% in the earlier decade.


Once again, the problem is not the technical feasibility of the gas tax after the relatively modest increases in gas mileage over the last two decades compared to the 1975-1985 period.  The problem is political will.


Finally, since the last time the Federal gas tax was increased in 1993, inflation has had 3 times the impact on the purchasing power of gas tax revenue as changes in mileage have had.  Any revenue source will fail over time if it is not adjusted (automatically or manually) to keep up with inflation.

Consumer Price Index:
1993  144
2013  233
An increase of 62%

Wednesday, September 17, 2014

U.S. DOT Secretary Foxx at ProWalk ProBike ProPlace


U.S. DOT Secretary Anthony Foxx speaking at the ProWalk/ProBike/ProPlace conference in Pittsburgh on September 10, 2014.