Higher gas prices are with us to stay, so the gas tax is headed for extinction.
That’s the counterintuitive message from Samuel Staley, a leading expert on free-market transportation policy.
“We’re not going to give up our cars” and the controlled environment and customized mobility they provide us, Staley said Tuesday at a luncheon held by the Georgia Public Policy Foundation, and in an interview with me beforehand. “What we’re going to do is find different ways to power our cars.” That means less gas used, and declining gas-tax revenues.
Staley sees China’s rising demand first-hand. He spends much of his time there, counseling local governments on transportation issues. (Flip over his business card, and you’ll see his contact information in Mandarin on the back.)
But even in a country where the demand for gas is soaring, Chinese authorities don’t depend chiefly on gas taxes to pay for new infrastructure. They’re tapping into private pools of capital — to such a greater degree than America does, Staley said, that it’s sometimes unclear to him which country is communist and which one champions free markets.
These public-private partnerships are a crucial supplement to government revenue streams for building transportation infrastructure, Staley said.
“If you’ve got a facility that will pay for itself, why [let government] get in the way?” he said, advising Georgia’s lawmakers to “put legislation in place so that these things go.”
Of course, private investors want to be repaid. The most common mechanism for doing this is a toll, which brings us back to phasing out the gas tax.
Even if gas doesn’t decline as an energy source, Staley argued, tolling is a better way to identify which road projects to build and then pay for them.
That’s because prices in any market — in this case, tolls — send the truest signal about which products — i.e., the routes formed by interstates, arterial roads and surface streets — consumers value.
Motorists will be able to access new lanes, or perhaps new highways, if they’re willing to pay for the privilege of moving at a guaranteed speed. An example is the network of high-occupancy toll (HOT) lanes planned for metro Atlanta, which Staley called “way ahead of the curve” nationally.
Perhaps best of all, “willingness to pay” dictates how and when investments are made, lessening political influence.
Those who favor public transportation can also take heart, and not only because tolling would guarantee a high minimum speed for buses. “With such a broad-based change” in the way we pay for our travel, Staley said, “everyone will recalibrate their trade-offs about which mode to use, and transit will benefit.”
MARTA, he said, should vary its pricing based on segments traveled, charging enough to cover its costs and then using vouchers to subsidize travel by the poor or elderly.
Even if all this sounds great, we are, by Staley’s estimation, 30 years away from relying totally on user pricing. What to do until then?
The interim solution in Georgia is for voters next year to consider a penny sales tax that would fund a list of projects selected by local elected officials and state planners. Such general revenues, Staley said, “should be the option of last resort.”
Given our traffic problems and the dearth of alternatives at hand, we’re arguably at the point of last resort. The question we need to discuss next is which projects would justify that option.
– By Kyle Wingfield