David E. Bruderly PE
920 SW 57th Drive
Gainesville FL 32607-3838
From: Dom Nozzi [mailto:[log in to unmask]]
Sent: Thursday, May 14, 2009 10:13 PM
To: 'Maull, Perry John'; Al & Sara Nozzi; Bruce Ritchie at work; Cindy
Smith; Chuck Woods; David P. Harlos, Sc.D.; Dan Burden; Dave Bruderly; Ed
Brown; Erik Lewis; Gary Anglin; Gina Rhine; Henrietta Near; Kimberly Perry;
Marlie Sanderson; Michael Ronkin; Michael Moule; Mighk Wilson; Mike Byerly;
Pavel Gubanikhin; Phil Martin; Randy Wells; Robbie Norris; Steve Lachnicht;
Subject: No Road Pays For Itself
From the Texas DOT newsletter, Nov. 20, 2006:
Do Roads Pay for Themselves?
... Until recently, when TxDOT built or expanded a road, no methodology
existed to determine the extent to which this work would be paid off through
The Asset Value Index, was developed to compare the full 40-year life-cycle
costs to the revenues attributable to a given road corridor or section. The
shorthand version calculates how much gasoline is consumed on a roadway and
how much gas tax revenue that generates.
The Asset Value Index is the ratio of the total expected revenues divided by
the total expected costs. If the ratio is 0.60, the road will produce
revenues to meet 60 percent of its costs; it would be "paid for" only if the
ratio were 1.00, when the revenues met 100 percent of costs. Another way of
describing this is to do a "tax gap" analysis, which shows how much the
state fuel tax would have to be on that given corridor for the ratio for
revenues to match costs.
Applying this methodology, revealed that no road pays for itself in gas
taxes and fees. For example, in Houston, the 15 miles of SH 99 from I-10 to
US 290 will cost $1 billion to build and maintain over its lifetime, while
only generating $162 million in gas taxes. That gives a tax gap ratio of
.16, which means that the real gas tax rate people would need to pay on this
segment of road to completely pay for it would be $2.22 per gallon.
This is just one example, but there is not one road in Texas that pays for
itself based on the tax system of today. Some roads pay for about half their
true cost, but most roads we have analyzed pay for considerably less.
(hat tip http://beyonddc.com)