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The Deets

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What’s the Cost of Owning a Car That You’d Drop for Car Sharing?

One common talking point with local car rental subscription services1. is that it will save you a TON of money. This is often based on cost of ownership estimates of around $10,000 per year. Here’s an example from Zipcar’s website breaking down how they get there:

With those assumptions, they calculate an annual cost of $9,684 per year:

Which looks quite good when compared to what Zipcar estimates I’d spend on their service annually:

To me, that seems inflated because people giving up their cars for car rental probably aren’t paying anything near that to own a car. For example, I plugged in what I believe are accurate costs for my 2007 Honda Civic. This car was purchased new and financed for a short period, so there were some finance charges to divide over the past 84 months. And I divided the purchase price by the KBB trade-in value and divided that by 84 months to account for depreciation.

I don’t pay for parking where I live, and assume I’d pay for the same amount of parking while out on the town, so that’s a wash. I have a garage I pay to maintain, but that’s not going anywhere. Our maintenance costs would be lower if we didn’t crack our front bumper jumping snow berms, but we don’t seem to be willing to change our behavior.

With those numbers plugged in, it looks like it costs around half of Zipcar’s default calculation to keep my car on the road:

But, that’s the cost of keeping my primary car on the road. I imagine that a large number of people considering using services like Zipcar are considering the switch by dropping their second car. In my case, the second car in our household was a Saturn wagon purchased used for $6,000 and driven for 12 years. I haven’t dug up the costs of keeping that car on the road, but they were surely lower than the Civic since it was driven less and maintained to different standards.

Anecdotally, this particular model of car rentals seems to be doing better with people going from zero cars to having some access than from people going from two to one or one to zero owned cars.

While there probably is someone who’s making car payments on a relatively new car (but, with lower maintenance costs), and paying a premium for car storage at home, who happens to live near a rental subscription location with reliable availability, that scenario seems very uncommon in most of America.

1. Often misleadingly described as “car sharing”, which is a twisted term to describe paying an Avis owned company for short term access to their car fleet.

Some Minneapolis Snow Emergency Car Towing Stats

Eric Roper has an article in the StarTribune that looks at which areas of the town see the most cars towed during snow emergencies. And, more interestingly, which areas see the least tows. It seems to correlate quite well with distance from the impound lots.

The data behind the map included some other variables that are kind of neat too. Here’s a spreadsheet with some tabs breaking down a few of those variables such as the age, make, model, and state where the towed cars are licensed.

Cars between 10-15 years old top the list for trips to the impound lot. Hondas and Civic are high among car models, which may say something about both their popularity and lifespan. Thirty states and two Canadian provinces were represented in the towing data.

@JoeSoucheray’s Cylinder Index is Twisted Logic

A friend of mine hadn’t heard of Joe Soucheray’s “cylinder index” concept before today. If you’re not familiar with it, people call into his radio show and run through how many internal combustion engine cylinders they store in their garage. The higher the number, by Soucheray’s definition and his audience’s understanding, the more manly you are.

Think about that. The more you rely upon carbon spewing engines to do manual labor, the more manly you are?

On the other hand, if I manage to commute, mow my lawn, and keep my walk clear with a cylinder index of 5, I’m less manly with those who need more (and larger) vehicles to commute and more (and larger) tools to do yard work.

If I hire a lawn service that uses gas leaf blowers that will also be used at 100+ other properties per year, can I take credit for 1/100th of a cylinder?

If I buy a friend some beer in exchange for using his 8-cylinder truck the one day per year when I could use one rather than own one myself and use for daily commutes, does that make me less manly? Can I get 0.02 cylinder index credits for that?

How many cylinder index offsets can am I due for not complaining about high gas prices while not stuck in long commutes with more than 4 idling cylinders?

What’s most strange about this to me is that some of the same people who take pride in wasteful spending and wasting finite energy resources claim to be fiscal conservatives.

Here’s an excerpt from Wikipedia’s description of Soucheray’s show:

Perhaps the main attraction of Garage Logic is the fact that anyone can become a citizen merely by declaring himself so—and that anything that defies logic (or is blindly followed by uncritical and emotional partisans) is open for pointed and unrelenting criticism.

Apparently, emotional, partisan behavior that leads to increased rates of asthma, exploding trains, and polluted water is acceptable in Gumption County. I suppose this comes from the same guy who sees waste in every government program that doesn’t involve subsidizing sports. Logically.

11 Nuggets on Minneapolis Car2Go / @car2goMPLS?

I’ve been using Car2Go for a few months now, but haven’t written about it yet, so I guess now is as good a time as any. For those of you who aren’t familiar with it, Car2Go is a car rental service that distributes cars throughout a city, let’s you check a car out using a card + PIN, then park the car somewhere else within the boundaries of their rental territory. You only pay for the time you use the car.

The big difference between this, door mall right on cars, and things like HourCar or ZipCar, is most rental services require you to return a car to where you got it. Car2Go, on the other hand, works well for short-term rentals (even a few minutes), 1-way trips, and trips where you plan to be somewhere for a while because you can check the car in when you get there, then take that (or a different) Car2Go home when you’re ready to return.

When I tell people about it, they tend to come up with a lot of “whatabouts”. Here are some common ones:

1. Whatabout the keys? It’s in the car. You unlock the car using a card. You put the key in a dock on the dash when you’re done with your trip.

2. Whatabout gas? That’s built into the price. If a car is low on fuel, you can earn credits (currently 20 minutes of driving time) for topping off the tank using a car card that’s in the car. You can also find cars low on fuel using this site I created.

3. Whatabout the size of those cars? Yep. They’re all SmartCar cars, which are 2-door cars with very little storage. They’re not ideal for every type of trip. It’s not the ideal car for a 60-minute daily commute, but it works fine for bopping around town.

4. How do you find them? There’s an app for that. And the website.

5. How much does it cost? You pay by the minute. Here’s an invoice for a trip I took from near Loring Park to the Crooked Pint. Five minutes of driving cost $2.32.

I didn’t have to pay that $2.32 due to credits I’ve received from topping off the gas tank on previous rentals, but that’s what it would normally cost. With tax, that’s 46.4 cents/minute. 38 cents per minute to Car2Go and 8.4 cents per minute to the Governor.

6. Whatabout taxes? The sales taxes are ridiculously high (something like 22%) because the service is taxed like a traditional rental car (a portion goes to subsidize Vikings fans who were too cheap to help pay for a new stadium). Politicians love taxation without representation, so often jack up taxes on car rentals. But, the vast majority of Car2Go users actually live in the city/county/state where they use them. A politician who thinks we’re better off encouraging car micro-rentals since they’re better for the environment in a variety of ways should consider figuring out how to carve out an exemption for car rentals below a certain duration to straighten this out.

7. Whatabout meters? Car2Go has permits on the cars that allow them to be parked at meters. Not ALL meters, but most. The cutoff is based on the meter’s time limit. If it’s a 2-hour meter or longer (so not a super high intensity zone) you can park the car there. Downtown, a lot of this parking is available near Gold Medal Park, Loring Park, Elliot Park and the North Loop. Looking at where Car2Go cars are parked downtown right now gives a pretty good sense of where works:

8. How do I get one of these magical permits? Seriously. I wondered the same thing. It would be awesome if I could ditch my own car at a meter without having to deal with meters. But, I think the cost would be tough to justify for the casual user. I don’t have an exact figure, but I’m pretty sure you can get quality contract parking downtown for cheaper than the permits. Which also suggests that the City of Minneapolis is collecting some significant revenue from those permits.

9. What if I want a car to be available for me when I leave what I’m doing? The app allows you to reserve a car for up to 30 minutes. If you don’t make it there in under 30, the reservation is cancelled and you can’t re-reserve the same car. Otherwise, I bet someone would create a macro on their computer to reserve the car in front of their house every 31 minutes to keep that thing locked down. You can also put the cars in standby mode while running errands, but the meter keeps running. If you plan to be out for a long time, the costs switches from a per minute to hourly at a lower rate.

10. Whatabout snow? Car2Go currently has around 250 cars on the road in Minneapolis with more on the way. That creates a bit of a logistical nightmare for them when there’s a snow emergency. They offer a time credit for people who help keep the cars from being towed as a way to crowdsource the work. I’ve put together a script to identify cars on snow emergency routes. So far it only works for Day 1. The reverse geocoding used to decide which side of a street a car is on isn’t perfect, so I’m working on ways to solve that for the Day 2 & Day 3 snow emergency routines.

11. What’s a good use for this? Whatever you’d like, as long as your destination is within Car2Go’s boundaries (currently Minneapolis’ city limits). For creative uses, you could drive one somewhere then run home. Or drive one somewhere that you plan on drinking, then use another form of transportation to get home. Or, drive them to the LRT down by the VA to catch the train to the airport (faster and cheaper than a cab or pure public transit in most situations). Drive on to the city limit, then catch a bus to shorten your commute. Drive one between points transit poorly serves.

Now I have something I can point people to when they ask me about this. Have any other questions or comments on the service? By the way, I’m not affiliated with the service. I’m just a bit of a power user.

Did Minneapolis’ Kids Lose Out to Vikings Stadium Subsidies? #wilfare

Curtis Gilbert at MPR reported on Governor Dayton’s choice to go against the recommendations of the Minnesota Department of Employment and Economic Development, by NOT funding top priorities in the 2012 Capital Projects Grant program and instead kicking $2 million toward Southwest LRT.

Gilbert explained that Minneapolis public schools were on the list to receive funding for some projects up until two days before the list was changed and announced to the public. Among the losers:

Minneapolis Public Schools asked for almost $2.8 million from the $47.5 million fund. It planned to use the money pay for improvements at three athletics facilities on the city’s north side: Artificial turf at Patrick Henry High School, an updated the swimming pool at Olson Junior High and renovations to Victory Memorial Ice Arena.

Now, why would Dayton do something like that? Who benefits from putting the SW LRT ahead of Minneapolis public schools?

Then, I remembered the Vikings stadium. During speeches from the house floor, at least one member of the legislature explained that he was going to vote for the Vikings stadium bill – despite it being a seriously flawed bill – because it would be reachable by the soon to be built SW LRT line. At the time, I thought “ah, that explains that vote. Dayton promised him money for LRT.” And, now we see where Dayton found the money. By taking it from Minneapolis public schools. (If someone knows how to pull transcripts from those hearings, I’d love to remind myself who made those statements.)

Here’s a look at the map of Senate and House votes (via Elevated GIS) for/against the stadium. Note that Minneapolis’s legislatures generally voted against the stadium while legislators along the new SW LRT line voted in favor of the bill:

MN Senate Vikings Stadium Votes along SWLRT Route

MN House Vikings Stadium Votes along SWLRT Route

And, of course, to the east of Minneapolis, we saw St Paul’s legislators receive state funding to publicly subsidize the Saints and Wild in exchange for subsidizing the Vikings and Timberwolves.

Janet Moore and Baird Helgeson Repeat Ridiculous Vikings Stadium Jobs Claims #wilfare

Note the sentence in parentheses at the end of the below paragraph from Janet Moore and Baird Helgeson’s StarTribune piece on Vikings stadium corporate welfare subsidies:

Gov. Mark Dayton said in a statement that although the Supreme Court challenge “had no merit, I was extremely concerned that this lawsuit would delay the financing of the stadium, and the progress” of the Downtown East development. “[The] decision clears the way for thousands of Minnesotans to get to work on these two important projects.” (The stadium project alone is expected to create 7,500 jobs over the next two years.)

Think about this. The Vikings stadium will take three years to build. The Vikings claim that it will take 4.25 million work hours to build the stadium. Let’s do the math:

425,000,000 work hours
Divide that by 2,080 hours (hours in a work year) converts that to 2,043 work years.
Divide 2,043 work years by the three years of the project gives us 681 full time jobs worth of work over three years.

Janet Moore and Baird Helgeson repeated the ridiculously misleading figure that uses the number of people who work on the job site over three years rather than the number of full time equivalents. It’s almost as if they work for a paper who’ll profit from the public subsidy.

Another way to look at this: The StarTribune could create 20 more jobs overnight if they cut back Janet Moore and Baird Helgeson’s hours to 3.632 hours per week and hired 18 new employees with the same hours. That would be a big jobs creation strategy if the goal was to inflate the number of people receiving a check from the Strib.

If the StarTribune wanted to be intellectually honest when reporting jobs claims by corporate welfare boosters, they’d explain stuff like this to their readers.

A “Reasonable Liberal” on Publicly Financing the NFL #wilfare cc @LiberalPolitico

A Twitter user who goes by the name “Reasonable Liberal” broke down a justification for subsidizing the Wilf Family of Fraudsters in New Jersey rather than investing Minnesota tax payers money in Minnesotans.

True. And, the people and businesses who appreciate that additional value the most are perfectly capable of finding their wallets to support the entertainment they appreciate. The MN Orchestra, unlike the MN Vikings, exposes kids to music rather than how to create concussions between arrests.

According to the Pioneer Press, the MN Orchestra received $962,000 in subsidies for a year, and the Minneapolis Convention & Visitors bureau claims that the MN Orchestra had 215,000 paid attendees. That’s an average subsidy of $4.47/ticket. Compare that to the Vikings subsidies of closer to $70/ticket per game for 30 years. And, I don’t believe I’ve ever seen an orchestra attendee buy beer by the case, then park in an empty lot to pre-orchestra.

The NFL puts you on the map for sure. Just look at what it’s done for Buffalo, Cleveland, and Detroit.

You’re right. Warren Buffett’s wrong. Case closed.

And, Kiplinger was wrong when they named Omaha the 3rd best place to live in the USA. And, was wrong when they named Omaha the 8th best place to live in America for families. Granted, Kiplinger’s overlooked having an NFL team in their ranking criteria. Instead, they used:

Population Growth Since 2000: 6.6%
Percentage of Workforce in Creative Class: 30%
Cost-of-Living Index: 89.4 (100 being national average)
Median Household Income: $51,627
Income Growth Since 2000: 15.1%

Different strokes.

Totally. No Minnesotan is proud of the local bands they’ve seen at First Avenue or Triple Rock. None take any pride in the orchestra, our local arts scene, or local beers. If you’ve ever seen a Minnesotan talking to someone from another state, there’s simply NOTHING they can bring up about Minnesota that they take pride in outside of our publicly subsidized NFL team. You’ll never hear a single mention of Target, General Mills, the Mayo Clinic, Surly or Summit beer, Spam, the State Fair, Lake Minnetonka, cabins, Bob Dylan, the Jucy Lucy, or the Coen Brothers. When it comes to sports references, you’ll never hear a single mention of the Timberwolves, Twins, Wild, Lynx, or any Gopher sports. None. Actually, one would have to have a very narrow obsession with a single sport that plays 10 home games per year to overlook this reality.

Personally, I’d like to see an “allegiance with my neighbor” built around this: what’s the best we can do for our kids? I don’t think the answer would be “subsidize the Wilf Family of Fraudsters” for many people who ask their neighbors that question.

Without four pro sports teams in Minneapolis and St Paul, what could people from the lakes region talk to people from the Twin Cities about? Would they have to cave to talking about subsidized baseball? Subsidized hockey? Subsidized basketball? Subsidized college football? What kind of world is that?

Do you honestly believe that America is healthiest if “the national conversation” revolves around alliances to each person’s publicly subsidized private NFL franchise?

Prove it. Not anecdotally. Prove that Minnesota and Minneapolis see actual net gains in population that justifies sending subsidizing a the Wilf Family of Fraudsters rather than spending that money investing in the kinds of things that tend to drive real estate prices (quality schools, low crime).

Haven’t you noticed that Minnesota pops up on nearly every list put out by publications ranking cities based on positive attributes? Best places to live, healthiest cities, fittest places, longest life spans, most educated populations. Where does having a publicly subsidized NFL team compare to things that have a significant impact on people’s lives rank? Have you not noticed that Minnesotans go outside in the winter? Ice fishing, hunting, snowmobiling, and XC Skiing don’t rely upon the level of subsidies we’ve given to the Wilf Family of Fraudsters.

The “no big loss” theory assumes that people may spend their weekends and entertainment dollars differently, but still largely within the State of Minnesota if we didn’t publicly subsidize an NFL team with $1.66 million PER GAME for 30 years BEFORE interest, and WITHOUT considering operating costs and the obvious future demands from the NFL to upgrade the stadium to make it “competitive”.

Those are all local non-profits that receive FAR LESS public subsidized than the for profit NFL team that’s owned by the Wilf Family of Fraudsters.

I’ve been to all. They’re assets to the community. As I’ve mentioned before, “The Guthrie’s per seat subsidy over 30 years comes to $1.67, compared to the Wilf’s current demand of $77.” Even with the Vikings being owned by the Wilf Family of Fraudsters who’ll suck money out of the State of Minnesota, I could see subsidizing a new Vikings stadium to the same per-seat rate as the Guthrie. That comes to $10.8 million.

It declares that we’re not Bridgeport, not Madison, not Raleigh, and not Austin, who all have higher numbers of college educated residents, but no NFL team.

Minneapolis is optimistic about its future. And Minneapolis residents just voted overwhelmingly in favor of a new mayor who voted against subsidizing the NFL.

Agreed. When the Building Trades lied to people on push poll phone calls, they didn’t do it out of love for the Vikings. They did it to influence people into supporting public subsidies for a bad project that would put them to work. Greed is a good motivator.


No. That’s a huge difference for a very small number of recruits who happen to be into music AND the Red Sox.

Many of the most elite schools in the United States are in communities that don’t have NFL teams. Perhaps we should focus on being more elite than providing entertainment to college students?

No, that’s not why the city and state did what they did. The DFL voted to support the unions who support them. Country club GOP members voted to subsidize the entertainment expenses of large corporations. Deciding votes among Minneapolis city council members justified their votes based on threats of money being taken from them by the state by union member legislators.

We didn’t invest. We subsidized. Los Angeles somehow survives just fine without pro football. I have no interest in living in Chicago and have many well paid friends who feel the same. If you need an NFL team to sell the benefits of Minneapolis over Chicago, you really should spend more time getting to know Minneapolis.

Honestly, the recruiting angle doesn’t do it for me. If local businesses thought that having an NFL team was critical to their success they could invest in it. In fact, that actually happened when the Metrodome was built. There was even money from a company called Dayton’s. Now, we have a Dayton redistributing money from Minnesota and Minneapolis taxpayers to the Wilf Family of Fraudsters in New Jersey.

Speaking of “reasonable liberals”, when the vote on the Vikings stadium took place, the reasonable liberals voted against the stadium. Reasonable liberals like Karen Clark, Jim Davnie, Frank Hornstein, Erin Murphy, Michael Paymar, and Jean Wagenius voted against the Vikings stadium corporate Wilfare bill in the house, and Scott Dibble, Kari Dziedzic, John Marty, and Patricia Torres Ray in the senate. These are reasonable people. I’m curious to find out who “Reasonable Liberal” considers to be reasonable liberals considering the opposition to the stadium subsidies by reasonable liberals.

How to Write a Response Letter. Example: @Rep_SAnderson on #SundaySalesMN

I don’t think allowing Sunday liquor store sales in Minnesota is the biggest issue facing the state, but it’s never a bad time to kill off Minnesota’s ridiculous blue laws. So, when MN Beer Activists sent out an alert that they were making a push on allowing Sunday sale, I was willing spend a minute filling out an online plea to MN’s elected officials.

Since then, it’s been interesting to watch the replies roll it. It turns out that the email went to ALL state level elected officials and not just the ones who represent me, so I’ve been receiving emails from state senators and reps who’ve found time to respond to non-constituents about this issue.

2/3 of the responses I’ve received have been from DFL legislators, and 100% of responses have been from people who support changing the law to allow Sunday sales.

Of the responses I’ve received, by far the best has come from Sarah Anderson. While politically divisive, she at least offers some decent advice on who to talk to if this issue is important to you:

Dear Sunday Liquor Sales Supporter,

Thank you for supporting my efforts to allow for the sale of liquor on Sundays. I voted FOR Sunday Liquor Sales, along with 21 of my colleagues.

Currently, the House, Senate, and Governor’s office are controlled by Democrats. Key Democrat leaders who OPPOSED Sunday Liquor Sales include: Joe Atkins, Paul Thissen, and Erin Murphy. Joe Atkins (Democrat – Mendota Heights) is the Chair of the Commerce Committee. Legislation on Sunday Liquor Sales needs to go through his committee. Paul Thissen (Democrat – Minneapolis) is the Speaker of the House. Speaker Thissen controls what bills are heard on the House Floor. Erin Murphy (Democrat – St. Paul) is the Majority Leader of the House. She advises Speaker Thissen on what bills should be heard on the House Floor.

For Sunday Liquor Sales to pass, the dynamic at the Legislature needs to change. I encourage you to contact your legislator and express your views.

Thanks again for your support!


Sarah Anderson
State Representative

That’s a solid letter. She states where she stands and points to who’s worth talking to for people who’d like to see this issue get resolved and put behind us. If all response letters from elected officials were this good, I think we’d have a far more informed and engaged public.

That said, it makes me wonder what type of letter Rep. Anderson wrote to people opposed to the Vikings stadium corporate welfare bill. She voted against that bill, which was great. But, at the time, did she write back to people opposed to the bill with letters like this?

Currently, the House and Senate are controlled by Republicans. Kurt Zellers (Republican – Maple Grove) is the Speaker of the House. Speaker Zellers controls what bills are heard on the House Floor. Matt Dean (Republican – Dellwood) is the Majority Leader of the House. He advises Speaker Zellers on what bills should be heard on the House Floor.

For the Vikings stadium corporate welfare baill to not pass, the dynamic at the Legislature needs to change. I encourage you to contact your legislator and express your views.

It would be great if she had, but I doubt it. Perhaps it’s possible to be powerless while in the minority and majority?

It’s Hard to Take the Opinions of ExxonMobil Funded Professors Seriously #VMT

Who would argue that fuel efficient cars are getting a free ride? If you guessed “Michael E. Webber, a professor in the energy department of a university in Texas where ExxonMobil is the largest corporate donor” you’d be correct:

Switching to a ton mile fee solves several problems at once: It raises the revenues we need for our transportation projects while ensuring that electric and natural gas vehicles don’t get a free pass.

The ExxonMobil funded professor’s proposal is to charge people a tax for every mile driven, then adjust by vehicle weight, so lighter cars would pay less than heavier ones. He explains that here:

It would also encourage people to drive smaller cars fewer miles, which would achieve additional benefits like reduced petroleum consumption, emissions, traffic congestion and wear and tear on the roads and highways.

You know what else would achieve those goals? Raising the gas taxes.

His plan could also encourage people to drive lighter, less fuel efficient cars, like the 14 MPG Camaro rather than the 1-ton heavier – but actually more fuel-efficient – Dodge Durango:

Screenshot 2013-12-24 10.18.57

But, the ExxonMobil real benefit under his VMT * weight plan is that it takes away one of the real incentives for buying the hybrid version of the same vehicle with virtually the same weight. For example, it costs around $4,000 more for the hybrid version of the Camry, but you’ll save quite a bit of money on gas (and gas taxes) over the life of the car, which helps economically justify that environmentally friendly decision:

Screenshot 2013-12-24 10.23.57

Hybrids sell better when gas prices are higher, which leads to cleaner air, less revenue for ExxonMobil, and ExxonMobil professors justifying eliminating one of the benefits of hybrid vehicle models.

How much money are we talking about?

Now, here’s where it becomes particularly difficult to take this ExxonMobil funded professor seriously:

Assessing a half-cent fee per ton mile would cost a typical American car owner about $50 per year and would cover the highway fund’s revenue shortfall, according to my calculations.

Here’s my calculation:

  • The average American driver drives: 13,476 miles/yr
  • The average American car burns: 24 MPG
  • So the average American driver burns: 561.5 gallons of gas/year
  • $50 in gas taxes split over 561.5 gallons of gas comes to 8.9 cents per gallon

If all we need to do is raise $50/year from drivers to solve our transportation funding gap, we could divide that $50 into the 561.5 gallons/year of gas burned per drive annually and realize that raising gas taxes by 8.9 cents/gallon would bring in the same revenue as this professor’s ExxonMobil supported, convoluted tactic.

Let’s take a look at this professor’s argument in favor of his VMT * weight scheme again:

It would also encourage people to drive smaller cars fewer miles, which would achieve additional benefits like reduced petroleum consumption, emissions, traffic congestion and wear and tear on the roads and highways.

Do you honestly believe that raising gas taxes by 8.9 cents/gallon (or, charged $50 annually) would achieve any of those things? Frankly, I have a hard time believing that he actually believes what he’s written.

Republicans should like it because it would end the subsidies for alternatively fueled vehicles . . .

So would raising the gas tax to a point where alternatively fueled vehicles were price competitive with carbon spewing ones. That actually would “reduced petroleum consumption, emissions, traffic congestion and wear and tear on the roads and highways.”

and Democrats should like it because it would encourage energy conservation.

So would raising the gas tax.

In this new phase of partisan agreement on budgets, revising the gas tax would be one more step in the right direction.

Can we all agree to agree with this ExxonMobil funded argument? Please?

Or, we could just raise the gas tax.

Perhaps ExxonMobil funding makes people blind to the obvious. Take this example:

Keep this fact in mind: There were about 260 million Americans in 1993 when the tax was last raised. Today there are over 315 million. And we travel more miles than we did two decades ago. That means the transportation infrastructure has to do more with less per-mile spending, adjusted for inflation.

He points out that we don’t have as much transportation spending power because the gas tax hasn’t been raised in 20 years, isn’t adjusted for inflation, or even taxed as a percentage of the price of fuel. It’s just a flat tax per gallon that hasn’t increased since “I Will Always Love You” by Whitney Houston topped the charts. However, he doesn’t jump to the simplest solution (raise the gas tax, then adjust it to inflation). That would involve removing his ExxonMobil funded thinking cap.

And, as we move into cities and use mass transit we will drive less.

Let’s throw people who ride buses and trains under the bus? Perhaps ExxonMobil can buy up our country’s newly laid LRT lines and tear them out? It wouldn’t be the first time they’ve done that.

As cars become more fuel efficient they require less gasoline.

Good. It’s dirty and dangerous to extract, refine, and transport, bad for our health, and bad for the environment.

At the same time, alternatively fueled cars such as electric vehicles don’t pay gasoline taxes at all, and others, such as natural gas vehicles, pay a lower rate on average, so the current system subsidizes their use.

I guess we could ignore that people driving fuel-efficient cars still pay a ton of taxes toward transportation through income, property, and sales taxes. That seems like a solid move for an ExxonMobil funded professor to make. One thing we won’t see from this ExxonMobil funded professor is a mention of how people who don’t own cars subsidize drivers through sales, property, and income taxes.

That means our gasoline purchases — and our gas taxes — are declining, putting a strain on our trust fund.

As an ExxonMobil funded professor, is he more concerned about declining gas taxes or gasoline purchases? Considering that his proposal is to actually eliminate gas taxes, which would lower the price of gas at the pump, it seems possible that people might end up buying more gas. Consider this: Do people buying heavier, more expensive cars (along with the higher taxes and licensing associated with them) consume less gas due to the higher annual fees? Would bumping up those fees by $50 change their behavior?

The problem is already acute. Since 2000, spending by the highway fund has generally outpaced revenues; since 2008, the fund has required an infusion of $41 billion from the federal government’s general fund.

A problem as simple to solve as increasing the gas tax is not a particularly challenging problem. As we get closer to finally adjusting the gas tax to deal with today’s economic realities, I can see why ExxonMobil and other carbon spewing companies would prefer to see our transportation infrastructure funded by something other than a tax on their pollutant.

And, again, guess who’s tax money is being used to finance the “infusion” that makes up for the gas tax shortfalls? Drivers of fuel efficient vehicles and people who don’t own cars at all.

As Kim P. Cawley of the Congressional Budget Office argued this summer in testimony before a House subcommittee, “The current trajectory of the highway trust fund is unsustainable.”

Indeed. It’s hard to pay for something that has increased costs when you’re using a tax last increased in 1993. But, that doesn’t make it an impossible problem to solve. In fact, it’s quite simple.

One other option would be to stop building/maintaining roads that encourage sprawl, lead to more gas consumption, but not nearly enough gas consumption to cover the cost of the roads and bridges that encouraged the sprawl. That tends not to be mentioned in this or other “lower the gas tax” editorials.

One choice, of course, would be to raise the gas tax. But this would surely raise the ire of many people and might be politically untenable.

Ire? We can’t have ire. Ire is what happens when people have to face the true costs of commuting by truck from an exurb. That must be avoided at all costs, right, ExxonMobil? ExxonMobil will surely do their part to help avoid rising the ire of many people by lobbying at all levels of government to make sure this doesn’t happen.

Coincidentally, as @sumnums pointed out on Twitter, ExxonMobil tossed some money at the NY Times while they’ve been running this ExxonMobil funded professor’s gas tax lowering argument on their homepage:

Exxon Ads on NY Times VMT Homepage

Purely coincidental, I’m sure.

What Should be Done if Gas Taxes Aren’t Raising Enough Revenue?

One thing that confuses me about transportation funding is the idea that raising gas taxes is politically impossible, but creating new forms of transportation taxes like a tax on every mile you drive would be feasible. To me, the raising gas taxes seems far more efficient since all of the systems are already in place to collect the taxes.

For an example of this, I’m going to break down a portion of an interview on the Exxon Mobil funded American Enterprise Institute’s website with U of MN transportation professor, David Levinson. Among the topics discussed was how transportation should be priced in the future. Levinson explains:

One of the predictions I have is that we eventually move over to tolling. Now, one of the reasons is if vehicle miles travel declines, the revenue source that we’re going to be using – that we’ve been using since the 1920s and are continuing to use to fund a lot of our road system — is the gas tax.

If we’re bringing in less revenue from gas taxes due to less miles being drive (or less miles than projected) it seems like raising gas taxes could make up for that fairly easily. It’s not like driving has plummeted in America, so we’re not talking about extreme measures.

Well, we’ll be consuming less gas because – gasoline because miles traveled goes down and we’ll be consuming less gasoline because fuel economy is improving and because we’re moving towards an electric freight.

If gas tax revenues dropped by 2%, gas taxes would need to increase by ~2.1% to make up the difference. What effect would nudging up gas taxes 2.1% on have on gas prices? It would cause them to spike by . . . 1.4 cents per gallon. Creating a new form of taxation seems far less efficient than making small adjustments to the gas tax over time.

If gas taxes were increased that little, I would expect it to have nearly no impact on people’s car purchase decisions and driving behavior. It would make up for lost revenue from fuel efficiencies and lower miles traveled without causing behavior-modifying pain.

But, if gas taxes were increased significantly more than that more people might consider buying slightly more fuel-efficient cars for their next purchase. Say, a Civic rather than an Accord. Or, consider the hybrid model. This seems like something that could create a positive feedback loop. If so, perhaps the increase in taxes would be offset by lower fuel prices caused by less fuel demand? It seems like the side effects of higher gas taxes (less congestion, getting hit slightly smaller cars, sharing the road with quieter cars, less damage to our roads, dealing with less ridiculous parking jobs by trucks that can’t fit into parking ramp spots, less dependence on oil, and less pollution) are fairly positive.

We have to switch from the gas tax to something else to fund infrastructure.

No, we don’t. The USA has the worst fuel efficiency standards in the world, yet countries with far more efficient vehicles still manage to build and maintain their roads and bridges. How so? It probably has something to do with gas taxes being far higher nearly everywhere else.

Retail Premium Gasoline Prices, Selected Countries

The country with the most expensive gas in the world happens to be an oil producing country. That’s right. They have oil, yet still have expensive gas because they think the benefits outweigh the costs. That country is Norway, where gas costs $10.12 per gallon with taxes. I had roommates from Norway in college, and when their friends from Norway came to visit they’d fight over who got to pay at the gas station because they thought it was so funny. They also thought it was funny that Americans had to take on so much debt to pay for college (their gas taxes help pay for roads AND free universities in Norway).

If we raised the federal gas tax from 18.4 cents to $7.184 per gallon, that tax would generate around one trillion dollars per year. According to this article, it would only cost around $13 billion to make public 2- & 4-year universities free in the USA. So, we could make college free for around 10 cents per gallon in gas taxes if higher education was a higher priority.

It would be interesting to see what changes $10/gallon would have in America. In my household (1-car family that drives around 11k/yr), that would equate to around $200/mo in additional car fuel costs, though not actually $200/mo in additional costs overall since it would just be a different way of paying for infrastructure and services than we do today. Still, I would imagine that it would create some changes in behavior. More fuel efficient cars are far easier to justify when they can save you thousands of dollars per year. For example, a family that drives a truck 15,000 and a car 12,000 miles per year with an average fuel efficiency of 20 MPG would spend $9,450 more per year on fuel at $10/gallon. A Prius starts looking pretty interesting when it saves thousands – rather than hundreds – of dollars per year in fuel costs.

Now, what that thing is, whether it’s congestion charges or whether it’s using general revenue is a political decision. We’d be much better off if we had congestion charges and mileage charges.

We already have congestion charges. When you’re sitting in bumper to bumper traffic, you’re getting crappy mileage. It’s a naturally occurring congestion charge. With gas taxes being so low in America, the pain doesn’t seem to adjust behavior to the degree that congestion charges (Levison’s apparent preference for having government impose those charges more directly) or significantly higher fuel costs would.

For example, if your car knew what your paid for gas, it could calculate and report your cost per mile for fuel in real time on the dash. At $3/gallon, cruising at posted highway speeds burning gas at a rate of 30MPG gallon costs 10 cents per mile in fuel. Once you hit congestion and are only getting 20 MPG or less in bumper to bumper traffic, your fuel cost jumps to 20 cents per mile or higher.

The gameification of driving behavior could be ratcheted up if people saw the real costs of their behavior, and even more if the stakes were higher due to higher gas taxes. A mileage tax, instead, would state, “You’ll pay the same cost no matter how much of a lead foot you are.”

And we’re moving in that direction, it seems. But that’s got to be implemented and people are really nervous about the government tracking where they’re going.

There are privacy concerns, and there are people – like me – who say, “Why not just raise the gas tax?”

And that would replace the gas tax and it could replace a lot of property tax revenue. So most local governments fund roads via property taxes. And there’s no reason it should be based on property taxes, except that historically it’s been based on property taxes and it’s hard for local governments to implement gas taxes because if one of them implements a higher gas tax, then people can easily go to the next county over, the next town over and buy gasoline somewhere else. Whereas states, you’re less likely to leave state to buy gasoline.

Levinson’s vision appears to be that mileage taxes would not only subsidize revenue lost from less driving and more fuel efficient cars, but also chip away at the tax revenues used beyond gas taxes to pay for roads. Another, simpler, way to do this would be to raise the gas tax to chip away at those taxes. But, I can see why people who own a lot of property might prefer to see transportation costs shifted away from their vacation homes.

So gas taxes have traditionally been at the state level and property taxes have traditionally been used at the local level to fund roads, but there’s no reason if you have a mileage-based user fee and you have a uniform rate you couldn’t use that to pay for highway financing. And then you can differentiate the price. So if you’re driving when it’s less congested, you don’t pay as much. And if you’re driving in areas with less traffic in general, you don’t pay as much. Would be a couple of things that you could do to try to soften the impact of this and to use the financing mechanism to help manage roads better.

We already have that with gas taxes. The taxes are just too low for most people to notice or care. The wheel already exists, but needs to be pumped up to be more effective.

I’m trying to wrap my head around why we’d want to charge people less for driving on roads that have “less traffic in general”. It seems like the roads they’re driving on would be some of the least efficient roads to maintain since they generate so few miles of driving. If you own a vacation home at the top of a mountain accessible via winding mountain road, you may drive where there is less traffic in general, but you’re not likely generating enough taxes to maintain the road to your property. This person deserves a tax break because they drive where there is less traffic in general?

Now, whether we’re going to go to a full-fledged highly dynamic congestion pricing system, that’s, I think, a few steps away, but it would be more efficient if we did.

That would make sure that the wealthiest have the smoothest commutes even at the most congested times of day (ex. I-394). That probably plays well with the American Enterprise Institute’s audience. If congestion pricing like this provided a luxury service at a price far beyond the cost, thus creating a progressive tax rather than a regressive subsidy for wealthy people with long commutes, I could live with it.

Arguments like this make me wonder who’d be in favor of shifting away from taxes on gas to forcing people to pay by the mile regardless of the fuel efficiency of their vehicle. It doesn’t seem like too far of a stretch to assume that people who profit from selling more gas, or actively ignore the environmental costs of driving, might prefer such a model. And, it turns out that that’s the case, as Media Matters reports:

The idea of charging drivers by the mile rather than by the gallon has found unlikely allies in the conservative Taxpayers for Common Sense and the libertarian Reason Foundation, which supports the “more logical and fairer method of paying for state highway needs.”

Taxpayers for Common Sense and the Reason Foundation think it’s “fairer” to charge a 47.8 MPG, 2,921 pound Prius driver the same cost per mile as someone driving a 16.6 MPG, 5,397 pound V-8 Dodge Durango. Do those cars create the same level of damage to our roads or emissions into our air? It’s the kind of fairness that the oil industry loves, and is willing to lobby for, since they’d be the winners.

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