Where and how does Oregon take money and where should Oregon spend it?
Most planners and policymakers are better to consider how they will fund their project. Where or how does the government collect the money and where should they spend it?
There are many ways to levy taxes and charges in transportation, including Gas Taxes, Road Pricing, and Congestion Pricing (Sorensen et al., 2012; Small, 2005). These are methods to levy taxes and charges from users who use public property roads or fuel (Small, 2005). While it is a way for the government to raise money, it has a variety of benefits, including reducing road congestion, reducing energy dependence, and improving air quality (Small, 2005). Oregon is taxing 36.7 cents per gallon through Gas Tax as of July 2018. It is the 12th highest tax amount in the United States and is raised about 5 cents from the last year(January 2017), but it is considerably lower than the one in adjacent states, Washington and California (Loughead, 2018; Drenkard, 2017) (Figure 1).
There are many ways to levy taxes and charges in transportation, including Gas Taxes, Road Pricing, and Congestion Pricing (Sorensen et al., 2012; Small, 2005). These are methods to levy taxes and charges from users who use public property roads or fuel (Small, 2005). While it is a way for the government to raise money, it has a variety of benefits, including reducing road congestion, reducing energy dependence, and improving air quality (Small, 2005). Oregon is taxing 36.7 cents per gallon through Gas Tax as of July 2018. It is the 12th highest tax amount in the United States and is raised about 5 cents from the last year(January 2017), but it is considerably lower than the one in adjacent states, Washington and California (Loughead, 2018; Drenkard, 2017) (Figure 1).
Figure 1 Gas Taxes in States
Source: TAX FOUNDATION, 2018; American Petroleum Institute.
Recently, there has been a way to levy a tax called Mileage Fees as much as the distance drivers travel (Sorensen et al., 2012). The primary purpose of this method is to provide a stable source of funding. This method focuses more on vehicle travel than on simple fuel consumption (Sorensen et al., 2012). It is true that the administrative costs are relatively high compared to other tax methods, but there are many advantages such as reducing traffic congestion, preventing overloading, and paying for adequate insurance (Sorensen et al., 2012). I think that this new method of taxation has fatal weaknesses such as the cost of developing technology, administrative costs, and the possibility of personal information leakage. Nevertheless, Oregon is committed to developing related technologies and policies for the new tax forms as a new source of funding (Sorensen et al., 2012).
Collecting money is essential, however, I believe that it may be more important to know where to spend it. In fact, a lot of taxes are being spent on road construction and repair. Oregon has a large budget to invest in roads like other states (Scarboro & Bishop-Henchman, 2017). Although gas taxes per gallon were lower than in Washington or California, the percentage of roads funding is higher than them (Scarboro & Bishop-Henchman, 2017) (Figure 2).
Collecting money is essential, however, I believe that it may be more important to know where to spend it. In fact, a lot of taxes are being spent on road construction and repair. Oregon has a large budget to invest in roads like other states (Scarboro & Bishop-Henchman, 2017). Although gas taxes per gallon were lower than in Washington or California, the percentage of roads funding is higher than them (Scarboro & Bishop-Henchman, 2017) (Figure 2).
Figure2 How Are your State’s Roads Funded?
Source: TAX FOUNDATION, 2017; the Census Bureau, State, and Local Government Finance and Federal Highway Administration data.
Source: TAX FOUNDATION, 2017; the Census Bureau, State, and Local Government Finance and Federal Highway Administration data.
So, where should Oregon invest for better transportation policy? Oregon is making a lot of effort to invest its budget in public transportation facilities, and the amount is actually increasing (Oregon Department of Transportation, 2017). The state's public transportation investment in 2016 was $843 million, with a goal of increasing it to $1.1 billion by 2020. What is noticeable here is that the rate from State sourcing will increase (Oregon Department of Transportation, 2017) (Figure 3).
Figure 3 Public Transportation Funds
Source: Oregon Department of Transportation, 2017.
As Jaffe (2012) suggests, Americans may prefer to use public transportation rather than driving their own vehicles. With the test result conducted by Maya Abou-Zeid of the American University of Beirut and Moshe Ben-Akiva of M.I.T., he argues that people like using public transit because of the cost, satisfaction, and productivity while traveling. Increased investment in sustainable public transportation may increase the likelihood of Oregon residents to use more frequent public transit since it could be an efficient travel mode for both the state government and residents considering cost, maintenance, and energy. Oregon, should you spend money on roads or public transit?
Reference
Drenkard, Scott. (2017). State Gasoline Tax Rates in 2017. TAX FOUNDATION. Retrieved from https://taxfoundation.org/state-gasoline-tax-rates-2017/
Jaffe, Eric. 2012. Even American Drivers Like Mass Transit More Than They Think. CITYLAB. Retrieved from https://www.citylab.com/transportation/2012/12/even-american-drivers-mass-transit-more-they-think/4142/
Loughead, Katherine. 2018. State Gasoline Tax Rates as of July 2018. TAX FOUNDATION. Retrieved from
https://taxfoundation.org/state-gas-tax-rates-july-2018/
Oregon Department of Transportation. Public Transportation Funding in Oregon. 2017. Retrieved from https://www.oregon.gov/ODOT/RPTD/RPTD%20Document%20Library/Transit-funding-in-Oregon.pdf
Scarboro, Morgan., Bishop-Henchman, Joseph. 2017. How Are Your State’s Roads Funded? TAX FOUNDATION. https://taxfoundation.org/state-road-funding-2017/
Small, K.A., “Road Pricing and Public Transit: Unnoticed Lessons from London,” Access, no.38, spring 2011. Retrieved from http://www.socsci.uci.edu/~ksmall/Transit%20-%20Access.pdf
Sorensen, Paul., Ecola, Liisa., Wachs, Martin. 2012. Mileage-Based User Fees for Transportation Funding: A Primer for State and Local Decisionmakers. RAND Corporation. Retrieved from https://www.rand.org/content/dam/rand/pubs/tools/TL100/TL104/RAND_TL104.pdf
Written by Kyuri Kim
Edited by Minju Kim & Anthony Tortorici
Hi Kyuri, Thanks for the great post. I think most of the funding focus on big cities and small cities receive less funding and maintenance. Recently, I was traveling to a small town located west Hillsboro and found so many potholes on the streets which it was very disappointing. I imagine the farmers living there are not so happy with the maintenance of the roads while they pay the same tax as everyone else.
ReplyDeleteThank you for sharing your great opinion!:) I also recognize that there are outskirts in Oregon still need the maintenance of roads or expand them. Nevertheless, I would like to emphasize the future direction that Oregon should take is the gradual extension of public transportation because of many other potential benefit such as active lifestyle, better air quality, less dependency on the fuel, and so on. Thank you again!!:D
DeleteMy response to your final question is that they should spend money on both! Focusing funds on public transit in areas that rely on it would prove beneficial, but would be a waste of money in an area such as the one described by Sara above. Transportation is not a one-size-fits-all thing. It different from region to region at all comparable levels such as state, city, county, etc.
ReplyDeleteI think an effective use of transportation money takes into account multiple groups of stakeholders and considers the diverse array of needs.
Thank you for your reading and comment!:) I agree with you partially, however, I just suggest that now the U.S. start to think "more" about the public transit rather than just expanding the highway. Thank you again for your interest in my post.:D
DeleteYes as Jensen mentioned I think in reality we need both roads and public tranist in working condition. Depending on the city and how the area wants to move forward I think it'll depend on the needs of people living in different areas. Id like to see a fazing out of car amenities in cities where public transit can easily be implemented but for others who NEED roads for their job lifestyle we can't have them be left out. Its a struggle to fund everything for everyone and have them be satisfied.
ReplyDeleteThank you for your comment!:D I wrote this post because I wanted to think about the budget ratio about the public transit in the whole transportation budget and I thought that it may be a good idea to share the change of government(Oregon) position about the public transportation in the future. Thank you for reading!:)
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