…at least in Houston, Texas. With non-automobile transportation options in the news, on of the interesting things is that the actual entire cost of automobile transportation infrastructure–that is, roads, is rarely discussed, while it is almost always raised with mass transit. But, by way of Ryan Avent, lookee what happens when the lifetime cost of highways is accounted for (italics mine):
The decision to build a road is a permanent commitment to the traveling public. Not only will a road be built, but it must also be routinely maintained and reconstructed when necessary, meaning no road is ever truly “paid for.” Until recently, when TxDOT built or expanded a road, no methodology existed to determine the extent to which this work would be paid off through revenues.
The Asset Value Index, was developed to compare the full 40-year life-cycle costs to the revenues attributable to a given road corridor or section. The shorthand version calculates how much gasoline is consumed on a roadway and how much gas tax revenue that generates.
The Asset Value Index is the ratio of the total expected revenues divided by the total expected costs. If the ratio is 0.60, the road will produce revenues to meet 60 percent of its costs; it would be “paid for” only if the ratio were 1.00, when the revenues met 100 percent of costs. Another way of describing this is to do a “tax gap” analysis, which shows how much the state fuel tax would have to be on that given corridor for the ratio for revenues to match costs.
Applying this methodology, revealed that no road pays for itself in gas taxes and fees. For example, in Houston, the 15 miles of SH 99 from I-10 to US 290 will cost $1 billion to build and maintain over its lifetime, while only generating $162 million in gas taxes. That gives a tax gap ratio of .16, which means that the real gas tax rate people would need to pay on this segment of road to completely pay for it would be $2.22 per gallon.
As Avent notes, “Keep this in mind whenever you read a crap analysis from Reason or Cato about how transit is a money loser.”
I think this also highlights how no transit system, whether it be rail, automobile, or aviation, can survive without massive subsidies. It’s just that some subsidies are easier to discern than others.