The C is for Crank

Hybrids Aren't the Reason Gas Taxes Are Declining

By Erica C. Barnett December 15, 2011

KOMO News reports this week that the state's ability to replace and fix roads and bridges is slipping because gas tax revenues are declining. That, as we've reported in the past, is true: Revenues from gas taxes are declining, and city and state transportation budgets are suffering as a result.

But KOMO's dead wrong about the reason for the decline. And the way that they're wrong says a lot about why it's hard to change policies around transportation---in particular, state and city leaders' inability to adapt to a world where more and more people are choosing alternatives to single-occupancy vehicles.

Let's start with the headline: "With rise of eco-friendly cars, Wash. sees slump in gas tax revenue." That's accurate, in the same sense that with the legalization of abortion, the national crime rate declined. Both things occurred at the same time, but there's little evidence that one caused the other---much less that, as KOMO's story concludes, "The state's gas tax take is dropping" because Washington is "really ahead when it comes to hybrids" and electric cars.

In reality, according to Clark Williams-Derry of the Sightline Institute, the number of electric cars sold in Washington State so far has been negligible; the number of hybrids, though higher, has not been enough to explain even a fraction of the decline in gas tax revenues. Although you "might see a tiny signal [from more hybrid purchases] that rises above the noise," Williams-Derry says, any decline in gas consumption is probably because people are driving/buying fewer trucks and more cars, not that a few car drivers are choosing hybrids."

There's also a question of whether gas tax revenues are actually falling, or merely failing to meet earlier projections that assumed gas consumption---and driving---would continue to increase indefinitely.

The more likely culprit? As gas prices increase and more options to driving alone become available, people drive less and use less gasoline overall. In fact, in the Northwest as a whole, gas consumption plateaued way back in 1999, indicating that people's appetite for driving has flatlined.

The solution, then, has to be revenue---either from a new, mileage-based tax system or from higher gas taxes. Interestingly, although the state transportation commission has said higher gas taxes are off the table, a new study concludes that the average state gas tax has actually declined 20 percent in real dollars since the last time it was raised, even as the cost of roads and bridges the gas tax pays for has increased. That suggests we could afford to raise the gas tax---or, conversely, that we can't afford not to.
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