Car trouble now? Just wait.

by Amanda Modglin, Vollmer Houston
Here in the United States, we love our cars. We detail them. We pimp them out. We have car clubs.

How would you feel if you had to change your tire every other week, or if you spent most of your gas sitting in traffic? Well that’s where we’re headed in the U.S.

Why are our cars in danger?

Simply put, there’s less money for road construction and maintenance. A-LOT-LESS. Meaning - your car will suffer a lot more.

So what’s the answer to this conundrum? You!

While this problem is nationwide, here’s the scoop in Texas:

TxDOT’s recently released transportation funding projection for the next 25 years is worse than officials expected. For example, the Houston region in now projected to only receive a little over half of the long-range transportation plan’s budget that was approved in 2007 for the next 25 years. Instead of $156 billion, they anticipate to receive only $85 billion. (For you non-mathematicians, we’re looking at $71 billion less to play with.)

This means the highway you commute to work on won’t be widened and the streets you turn off on to go home will be riddled with potholes. Wish your patience and tires good luck.

Why the huge shortfall?

The problem is related to a few issues, but most notable are the recent recession and the ever decreasing motor fuels tax revenue.

The recession is a relatively recent part of the problem and isn’t the biggest concern, as eventually the economy will bounce back.

The key issue and something you should be aware of (and maybe concerned about too) is finding a new source of revenue for transportation project funding, because the current motor fuels tax revenue is dying off rapidly.

The motor fuels tax has not been increased since the early 1990s, so over time, as inflation rises, we lose money for roads. Throw in a new wave of developing hybrid vehicles that has evolved much faster than anyone expected – and now the bottom is falling out.

What does that mean for roads?

As populations are on the rise, this funding shortfall becomes a concern to the infrastructure of many cities, because there’s a lot less money to keep up with the booming population. So either stop having babies… or lets find a solution.

Great, there’s no money. Where do we go from here?

Well, here’s where you come in. The first thing to realize is that roads are never “free.” Many of us say “no toll roads, build free roads,” well those “free roads” used to be paid for by the revenues generated. If fewer revenues are collected, the state has to find other ways to fund transportation projects.

We must come to grip with the reality that what we’re doing right now no longer supports us. Our habits as a population are evolving (fuel-efficient cars, etc.); therefore our government must evolve in collecting revenues so that we are able to have money for things we now feel entitled to, such as nice roads.

Our Texas government will someday need to consider addressing this change, and when they do, here are a few of the options on the table:

• Inflation Indexing of Motor Fuels Tax– Each gallon of gasoline includes 38.4 cents of tax: 18.4 cents federal tax, set in 1993; and 20 cents state tax, set in 1991. (Diesel is 22.4 cents federal and 20 cents state). Because these rates have not been indexed to inflation, the purchasing power of the revenues has declined over the years. If the state gasoline tax had been indexed to inflation since 1993, then 2009 revenues would have been $800 million higher.
• Increase Motor Fuels Tax – At its peak in 2008, Texas sold 15.5 billion gallons of motor fuel (11.7 B gallons of gas and 3.8 B gallons of diesel). Fund 6 revenues for transportation totaled $2.3 billion. Each one-cent increase in motor fuels tax adds $142 million to transportation funding, a potential gain to our region of $28-32 million. However, future returns are expected to diminish as less fuel is consumed due to higher fleet fuel economy.
• Fund 6 Diversion – Beyond the 25% of motor fuel revenues devoted to fund education in the state, diversions to other state programs have grown to 13% of Fund 6 revenue. In 2009, the diversion totaled $766 million, amounting to a $150-170 million loss to our region.
• Vehicle Registration Fee – Currently, the typical vehicle registration fee is $50. A $25 increase in registration fees would generate nearly $600 million per year over the next decade.
• Vehicle miles traveled (VMT) Fee – VMT fee potentially has the greatest effect on future revenues because it will not diminish due to increased fleet fuel efficiencies. A penny per mile could generate almost $5.8 billion for the Houston region over the next decade. 

So what can you do? Get involved. Write your local state representative and tell them how you would fix the problem. Remember, there are a lot of people and more are coming, so the issue cannot continue to be ignored. Let’s bite the bullet and fix the problem.