Latest / Thinking Transportation: Engaging Conversations about Transportation Innovations / Ante Up. Are all road users paying their fair share?
Transcript
- 0:16Bernie Fette (host): Welcome to Thinking Transportation, a podcast about how we get ourselves and our stuff from one place to another, and what it takes to make that happen.
- 0:27Bernie Fette (host): I'm your host, Bernie Fette with the Texas A&M Transportation Institute.
- 0:31Bernie Fette (host): You might have noticed all the electric cars on the roadways lately.
- 0:37Bernie Fette (host): Each one takes up an amount of space on the roadway that's more or less equal to the space that's needed by a gas-burning vehicle.
- 0:46Bernie Fette (host): But what they don't share equally is how much they pay for using that space.
- 0:52Bernie Fette (host): Our transportation infrastructure is funded mostly by the tax on gasoline and diesel that power what most of us drive.
- 1:00Bernie Fette (host): Since electric vehicles don't run on gasoline, they don't pay that tax at the fuel pump.
- 1:05Bernie Fette (host): The gas tax hasn't been raised in about 30 years, though roadway construction and maintenance costs have increased almost every year due to inflation.
- 1:15Bernie Fette (host): What's all that add up to?
- 1:18Bernie Fette (host): The gas tax pays for a lot less than it used to because there's less of it to go around, now that fewer vehicles on the road need gas to run.
- 1:27Bernie Fette (host): And that's only part of the challenge, as we're about to hear from Brianne Glover.
- 1:31Bernie Fette (host): Brianne is an associate research scientist at TTI, and she's an expert on infrastructure investment.
- 1:38Bernie Fette (host): Thank you for being here, Brianne.
- 1:39Brianne Glover (guest): Happy to be here.
- 1:41Brianne Glover (guest): Thanks for having me.
- 1:41Bernie Fette: So just in the last few years, if you want to talk about infrastructure investment, you really have to talk about what kinds of vehicles are using that infrastructure.
- 1:53Bernie Fette: And that seems to be more true now than it was 10 years ago or even five years ago.
- 1:59Bernie Fette: Is that fair to say?
- 1:59Brianne Glover: So you mean what type of vehicles are using it as far as like electric or trucks?
- 2:05Bernie Fette: Yes, that mix, over the years, certainly seems to have changed, and along with it changed how the conversation goes.
- 2:13Brianne Glover: I think it kind of goes in cycles, because I can remember probably close to a decade ago, the same kind of topic came up where it was our trucks doing damage to the road.
- 2:23Brianne Glover: Are they paying for their fair share?
- 2:25Brianne Glover: What would their fair share be?
- 2:27Brianne Glover: And it, it never really got any traction and it kind of, you know, disappeared as we came up with other types of funding streams to talk about.
- 2:35Brianne Glover: We diversified the toolbox a little bit.
- 2:38Brianne Glover: And then it's recently, it seems to have reemerged as a topic, you know, looking at what, do we have too many heavy trucks on the road?
- 2:45Brianne Glover: Are they paying enough?
- 2:46Brianne Glover: That sort of thing.
- 2:47Bernie Fette: And that has reemerged at roughly the same time that we're seeing a lot more electric vehicles out on the roads, right?
- 2:54Brianne Glover: That's true.
- 2:55Brianne Glover: Yes.
- 2:55Bernie Fette: Can you paint a picture for us of what the mix of vehicles on the road right now looks like and how that's changed recently and how it might change more in the next 10, 20 years?
- 3:07Brianne Glover: Yeah.
- 3:07Brianne Glover: So in Texas, there's a little more than 25 million vehicles on the road.
- 3:12Brianne Glover: About 85 percent of those are what we call light duty, and that is your passenger vehicles, your light duty trucks, you know, that you're commuting with every day on the road.
- 3:21Brianne Glover: And of these light duty vehicles, about 1.5 percent of those are what we are calling alternative fuel vehicles.
- 3:29Brianne Glover: That's your electric vehicles, your hybrid vehicles, which kind of have the bigger slice of that pie.
- 3:35Brianne Glover: And then a very small category of other, which is like your natural gas and your propane-powered vehicles.
- 3:40Brianne Glover: And so we get that question a lot, you know, what's the future going to look like for electric vehicles?
- 3:45Brianne Glover: So we've worked with some of our TTI colleagues that do energy and emissions research, and we created a forecast to see what these numbers might look like in the future.
- 3:55Brianne Glover: They came up with a bunch of different scenarios that looked at different growth rates, you know, some slower, some faster than others and different saturation rates.
- 4:03Brianne Glover: What's the market going to look like?
- 4:05Brianne Glover: You know, are people buying more of them or less at different times and kind of one of the middle scenarios-- that's kind of the one I've, I'm defaulting to-- showed that these alternative fuel vehicles are growing a little more than 20 percent annually over the next 10 years.
- 4:19Brianne Glover: So between now and 2030, and that's a pretty healthy growth rate, 20 percent.
- 4:23Bernie Fette: That sounds like a lot.
- 4:24Brianne Glover: Yeah.
- 4:25Brianne Glover: And then it kind of shows it plateauing a little or slowing to that growth to like about 10 percent between 2030 and 2050.
- 4:33Brianne Glover: So it kind of reaches a saturation point and then slows the growth a little bit.
- 4:38Brianne Glover: So that 1.5 percent that we have right now, that seems pretty low, but that's looking to change pretty, pretty rapidly.
- 4:45Brianne Glover: One of the scenarios shows that alternative fuel vehicles could be 70 percent of all the registered vehicles by 2050.
- 4:53Bernie Fette: And that can create under the current way that roads and bridges are funded, that can create an imbalance, right?
- 5:01Brianne Glover: It can.
- 5:02Brianne Glover: Yeah.
- 5:02Brianne Glover: So when we have, we've looked at so about 60 or 65 percent of transportation revenue in Texas is what we consider funded by traditional revenue sources.
- 5:12Brianne Glover: That's your, you know, your fuel tax and your vehicle registration fees.
- 5:17Brianne Glover: So fuel tax, both at the state and federal level is a really big chunk of our revenue.
- 5:21Bernie Fette: And how long has it been that way?
- 5:23Brianne Glover: It's actually shrunk a little, the slice of the pie because we've, we've brought in a lot of other different types of revenue sources.
- 5:30Brianne Glover: That whole diversifying-the-toolbox sort of thing, again, comes in.
- 5:35Brianne Glover: But it's still a pretty big chunk of the pie.
- 5:37Brianne Glover: And so if we have all these, these vehicles are growing that are not purchasing gas and, you know, paying that fuel tax, then that's less revenue for the highway fund.
- 5:47Bernie Fette: But what we're talking about really is, it's not just about electric cars as you, I think, were beginning to explain, those cars and that much greater mix of vehicles with alternative fuel vehicles making up a potentially much greater share of what's on the road in the future, is just exposing how a system that worked well for a long time might not be working as well right now.
- 6:10Bernie Fette: And if I understand right, that creates what people in the economics business call a structural deficit.
- 6:17Bernie Fette: So can you kind of explain that for us, what that means and what it does, for all of us non-economists?
- 6:24Brianne Glover: Yeah.
- 6:24Brianne Glover: So, so the issue with the fuel tax is kind of two- fold.
- 6:28Brianne Glover: First, the motor fuel tax, you're taxing it by the gallon.
- 6:32Brianne Glover: So it has nothing to do with changing fuel prices, which a lot of people don't realize.
- 6:36Brianne Glover: So the state tax is 20 cents per gallon.
- 6:40Brianne Glover: Um, 20 cents, whether gas costs$2 a gallon or$4 a gallon, it's 20 cents per gallon.
- 6:47Brianne Glover: And then that 20 cents is further sliced and diced where transportation only gets 75 percent of that.
- 6:52Brianne Glover: And 25 percent goes to education.
- 6:54Brianne Glover: So this tax, you know, you mentioned earlier was a long time ago.
- 6:57Brianne Glover: It was set in 1991.
- 6:58Brianne Glover: It's been this way for a long time, um, in Texas and the federal gas tax, which is 18.4 cents per gallon, that was set in 1993.
- 7:08Brianne Glover: So these taxes have remained unchanged for like 30 years, but the cost of things has changed a whole lot in those 30 years.
- 7:15Brianne Glover: The price to buy a house, a car, um, you go to the grocery store and you buy a gallon of milk or a loaf of bread.
- 7:21Brianne Glover: All of those costs have gone up a lot in 30 years.
- 7:24Brianne Glover: And then the cost of construction has gone up as well.
- 7:27Brianne Glover: So in 1991, 20 cents of gas tax revenue would buy you 20 cents of construction, but now, or let's just use 2019, 20 cents will buy you like 5 cents of construction.
- 7:39Brianne Glover: So inflation is a pretty big problem with the gas tax revenue stream.
- 7:44Bernie Fette: Taking a very big bite out of it.
- 7:46Brianne Glover: It has, yes.
- 7:47Brianne Glover: It means because it's time, it's basically time.
- 7:49Brianne Glover: 30 years.
- 7:50Brianne Glover: The other issue aside from inflation is that cars have gotten more fuel efficient over the last 30 years.
- 7:57Brianne Glover: I've purchased a lot of vehicles in the last 20 years that I've been driving and each one of them has become more fuel efficient.
- 8:04Brianne Glover: And so with each car that I purchase, I'm driving further on a tank of gas, which means I'm buying less fuel at the pump, which means I'm paying less revenue into the gas tax, the motor fuels tax revenue.
- 8:17Brianne Glover: And so one of the things in the past, that's kind of helped balance that out is that Texas is a growing population.
- 8:24Brianne Glover: And so we keep adding drivers to the road.
- 8:26Brianne Glover: And so that's more people that are buying fuel and that's kind of helped balance out that, you know, decline that we're seeing from fuel efficiency.
- 8:33Brianne Glover: But in recent years, it's kind of caught up with us.
- 8:36Brianne Glover: We're still getting, you know, more population growth, but the, the fuel efficiency is kind of outpacing it.
- 8:42Bernie Fette: So, in short, you have the fuel tax paying for less than it used to pay for.
- 8:50Bernie Fette: And you've got a growing number of vehicles that aren't paying that tax at all.
- 8:54Brianne Glover: That's right.
- 8:55Bernie Fette: Okay.
- 8:57Bernie Fette: The conversation we're having started out with alternative fueled vehicles in the form primarily of electric vehicles, but there are other vehicle classes that come into this picture, too.
- 9:07Bernie Fette: You started out by mentioning trucks.
- 9:11Bernie Fette: Can you talk a little about how the truck question has emerged at the same time that electrics and hybrids have come into the discussion?
- 9:20Brianne Glover: Sure.
- 9:20Brianne Glover: So, that conversation typically revolves around the vehicle registration fee.
- 9:26Brianne Glover: That again was another one of those traditional funding sources that's, you know, a decent slice of the pie, and a passenger vehicle pays about$50 to the state annually.
- 9:37Brianne Glover: Um, when you get your bill in the mail, it's, you know, it's more than$50 because there's, you know, a fee to the county and there's some processing fees, but, but the state gets about$50 of that,$50 and 75 cents.
- 9:47Brianne Glover: Now the amount you pay per vehicle, that goes up by weight when you get past passenger vehicles, when you get above 6,000 pounds.
- 9:54Brianne Glover: And so at that point, we're talking trucks.
- 9:56Brianne Glover: The heavier the vehicle, the greater the fee, is how Texas i s sort of structured right now.
- 10:01Brianne Glover: And so the reasoning behind this is that the heavier vehicles are doing more damage to the r oads, so they should pay a heavier fee, a higher fee.
- 10:08Brianne Glover: And so that becomes, are they paying enough?
- 10:11Brianne Glover: That seems to be the question that comes up.
- 10:13Brianne Glover: There's even, u m, a bill in the Legislature right now that's looking to gather data and conduct a study to see how much each vehicle weight category is contributing to revenue.
- 10:24Brianne Glover: And then how much of the cost, you know, y our roadway maintenance costs, your construction costs, are getting sort of attributed to each of these weight classes.
- 10:32Brianne Glover: And so I think t hat that's a pretty important thing to know, at least, that can change a lot of things, that can change what the fee is, that can change heavy truck policy in the future.
- 10:43Bernie Fette: So the purpose of the study that you're talking about in the Legislature is intended to just gather as much information and make sure that the decisions that are made are as informed as they can be?
- 10:56Brianne Glover: Yeah.
- 10:58Brianne Glover: I think it's a question of equity that comes down to equity between the different vehicle classes.
- 11:03Brianne Glover: If one vehicle class is paying more than their fair share of the costs, then another class is paying less.
- 11:11Brianne Glover: And so it's, it's all about balancing that.
- 11:14Bernie Fette: It sounds like the way that funding our infrastructure in Texas then might look a little different in future years.
- 11:21Bernie Fette: Can you run through what options we have to address that question in the future and maybe what the upside and downside of the various options are?
- 11:31Brianne Glover: Yeah, so, what the mix has looked like has changed a lot over, say the past decade.
- 11:38Brianne Glover: And we used to just have those traditional funding sources, you know, your gas tax and your vehicle registration, and then a few other miscellaneous fees.
- 11:46Brianne Glover: Um, in the past, we've also done bonds to help pay for transportation projects.
- 11:52Brianne Glover: That was basically, you know, putting it on the credit card.
- 11:55Brianne Glover: The bonds were guaranteed by transportation revenues or even, you know, general revenue.
- 12:01Brianne Glover: And so that was one option that we've employed in the past.
- 12:05Brianne Glover: Two of the other things that they've done recently in the past decade were Prop 1 and Prop 7.
- 12:11Bernie Fette: And those were voter initiatives, right?
- 12:14Brianne Glover: They were, yes.
- 12:15Brianne Glover: And they passed up with a pretty high percentage.
- 12:18Brianne Glover: I think both of them did.
- 12:19Brianne Glover: And so it's really kind of diversified our transportation funds.
- 12:22Brianne Glover: Prop 1 allocates part of the state's oil and gas severance tax; the oil and gas severance tax is a tax on production.
- 12:34Brianne Glover: And so it's really based on the price of oil and the amount of oil and gas that we're producing in the state.
- 12:41Brianne Glover: And so while it's been a great revenue source for transportation, it's very hard to predict.
- 12:47Brianne Glover: It fluctuates.
- 12:48Brianne Glover: I mean, if I could predict the price of oil, I'd be a billionaire.
- 12:52Brianne Glover: This past year Prop 1 revenues have been down because the price of oil and production here in the state have both been down.
- 12:59Brianne Glover: They've been creeping back up a little recently.
- 13:01Brianne Glover: And so our revenue has been creeping back up a little, but it's very hard to predict, which makes it hard to plan for transportation projects into the future.
- 13:11Bernie Fette: Of course, the tax being the same as it, as it has been for so many years, there's always the possibility that that could change.
- 13:17Bernie Fette: But there's also the question of charging by the mile.
- 13:20Bernie Fette: Can you talk a little about how a vehicle miles traveled cost or fee would work, and whether or not it's being used anywhere?
- 13:30Brianne Glover: Yeah.
- 13:30Brianne Glover: So that's been kind of a hot topic recently in transportation funding.
- 13:34Brianne Glover: So vehicle miles traveled fee is where you're basically charged based on the number of miles that you travel.
- 13:43Brianne Glover: And there've been a lot of pilot studies that have happened.
- 13:46Brianne Glover: I know Oregon, I think Washington state, maybe Utah have implemented some different pilot studies on the topic.
- 13:54Brianne Glover: And so there's a lot of different ways to institute it to, you know, do you check the odometer when someone comes in to get their vehicle inspected annually?
- 14:02Brianne Glover: Do you have some sort of device that gets scanned?
- 14:05Brianne Glover: And so while it's a really good idea because it's, it's a true user fee, you're, you're charged based on the amount of travel, the amount of the road that you're using.
- 14:15Bernie Fette: Which is not unlike how we pay for electricity, right?
- 14:18Bernie Fette: It's treating it as a utility.
- 14:21Brianne Glover: True, yeah.
- 14:21Brianne Glover: Much more so than, than some of our other, you know, where you just pay a flat annual fee as a registration fee or the gas tax, which is, you know, having some forgone revenue based on some of these alternative fuel vehicles that aren't paying anymore.
- 14:34Brianne Glover: The vehicle miles traveled fee gets a lot of pushback due to privacy.
- 14:38Brianne Glover: That seems to be the number one kind of,"whoa, let's talk about this" issue that comes up-- privacy, because people aren't necessarily wanting everyone to know where they're traveling or how much they're traveling.
- 14:49Brianne Glover: And so I think that's really spurred some different ideas on how do we institute this type of fee.
- 14:54Brianne Glover: And so that's what these pilots are working on.
- 14:57Brianne Glover: And I think we'll see a lot more of them in the coming years and see some states actually start to institute that.
- 15:04Bernie Fette: At the risk of asking you to make a prediction, how long do you think it might be or how maybe I should ask how soon it might be considering everything that we've talked about, that our picture of funding transportation might be notably different than what we've been used to for the last several decades?
- 15:22Brianne Glover: Well, I mean, I think even in Texas, we're seeing that change.
- 15:24Brianne Glover: Again, that that traditional funding is, you know, 60 percent of the pie instead of a hundred percent.
- 15:29Brianne Glover: We've added in a lot of different things.
- 15:32Brianne Glover: And so people are getting more creative with different ways to fund transportation.
- 15:38Brianne Glover: I think we'll see some other states start coming up with, like we said, the VM fee probably before Texas does, but I think that it's something that comes up and that we keep, you know, in mind.
- 15:51Brianne Glover: And so, um, I can't really, I don't really know on the timing, but I, I see it coming.
- 15:56Bernie Fette: The, the mix that we've talked about, the different, uh, factors that go into that equation.
- 16:00Bernie Fette: You and your colleagues have actually created an online tool to help people see how that might work, the TRENDS model.
- 16:09Bernie Fette: Can you explain briefly how that works?
- 16:12Brianne Glover: Yeah.
- 16:12Brianne Glover: So the TRENDS model is the Transportation Revenue Estimator and Needs Determination System-- it's a mouthful.
- 16:21Brianne Glover: And it's been around for about a decade.
- 16:22Brianne Glover: Um, we built it together with TxDOT as a forecasting tool, a forecasting tool to look at different revenue sources that we currently have and what the amount that they'll forecast out into the future, but also to look at possible revenue sources that we're not currently using.
- 16:41Brianne Glover: And so that's where, you know, like your VM fee comes in-- your vehicle miles traveled fee.
- 16:46Brianne Glover: Um, different local options are in there as well, where you can pick a MPO or a county and say, okay, I want to, I want to institute a local vehicle registration fee or a local gas tax in this area only.
- 16:59Brianne Glover: And you can see what kind of revenue that that will produce.
- 17:03Brianne Glover: There's other things; you can change up how much money is spent in the state on maintenance, on added capacity, that sort of thing.
- 17:10Brianne Glover: There's a ton of different factors in there that you can play with and see, you know, I want to change the vehicle registration fee.
- 17:16Brianne Glover: I want to look at only electric vehicles and I want to charge them$200, you know, or$100 more extra on the vehicle registration fee to make up for the gas tax.
- 17:27Brianne Glover: There's all these different what-if scenarios on that you can do and play with in the model.
- 17:32Brianne Glover: And it sort of spits out for you an output that says, okay, with all these selections that you've made, this is what your revenue for Texas will look like out to 2050.
- 17:42Brianne Glover: And then you can even break that down by MPO and say, okay, then what's my share?
- 17:46Brianne Glover: What am I getting?
- 17:47Bernie Fette: So that's one tool you have for, kind of looking into the future.
- 17:51Bernie Fette: It's short of a crystal ball, but it's, it's more than you had a decade ago, certainly.
- 17:54Brianne Glover: Yes.
- 17:56Brianne Glover: It's very helpful.
- 17:57Brianne Glover: We've used it to help answer questions for the public, for policymakers.
- 18:02Brianne Glover: It's very, user- friendly.
- 18:04Bernie Fette: What's the most important thing concerning the whole transportation funding picture and set of needs right now?
- 18:12Bernie Fette: What, what's the most important thing that you think we should be doing to prepare for what's coming?
- 18:20Brianne Glover: Education.
- 18:20Brianne Glover: Educating the public.
- 18:20Brianne Glover: The more they understand where the money comes from, how transportation is funded, what are our options and how do they work, I think then the easier it will be for us to open up that toolbox to diversify and look at different options when people know where we stand and what this option will give us.
- 18:40Brianne Glover: I think they are a lot more accepting and a lot more understanding.
- 18:43Brianne Glover: I just think we need to educate the public more.
- 18:46Bernie Fette: It is a complex picture.
- 18:47Brianne Glover: Yes.
- 18:47Bernie Fette: So you graduated from law school and became a transportation economist.
- 18:56Bernie Fette: How'd that happen?
- 18:58Brianne Glover: So I actually worked for a civil engineering firm before I went to law school.
- 19:03Brianne Glover: Law school was kind of a second career for me or a big career change for me.
- 19:09Brianne Glover: Um, so I was a drafter and I did bid estimates for different highways, projects in the area.
- 19:15Brianne Glover: And then I went to law school, not really wanting to be a lawyer, just wanting to do something different.
- 19:18Brianne Glover: And so when I got out of law school and I looked into TTI, I thought, huh, that's cool.
- 19:23Brianne Glover: I can, I can, I like numbers.
- 19:25Brianne Glover: I like to play with spreadsheets, that sort of thing.
- 19:27Brianne Glover: And so this job really lets me do just that.
- 19:30Brianne Glover: Yeah, I like to kind of tear things apart, different issues and and put them back together.
- 19:35Bernie Fette: So maybe when everybody else, years ago, when you were in school, was out playing soccer, you were playing with spreadsheets.
- 19:44Brianne Glover: Well, I don't, I don't think we had spreadsheets back then, but yeah.
- 19:49Bernie Fette: Okay.
- 19:49Bernie Fette: You said that you didn't really want to be a lawyer, but you, I guess could have been.
- 19:53Bernie Fette: And what you're in now is a field of public service as opposed to working for a big law firm someplace.
- 20:00Bernie Fette: What is it that motivates you toward public service?
- 20:03Brianne Glover: That's a tough one.
- 20:07Brianne Glover: Public service.
- 20:08Brianne Glover: I mean, I just, I like being able to explain things to people and I like being able to help people to understand what it is that they're getting and what it is that they're dealing with.
- 20:19Brianne Glover: And I think transportation is a confusing topic.
- 20:22Brianne Glover: People don't really understand it for the most part.
- 20:25Brianne Glover: And so the most rewarding part of my job is being able to help people understand that and explain to them, you know, what it is what's going on.
- 20:35Bernie Fette: Well, we're glad you made the choice that you did.
- 20:37Brianne Glover: Thanks.
- 20:37Bernie Fette: And we're also really glad that you could spend this time with us.
- 20:42Bernie Fette: Thank you, Brianne.
- 20:43Bernie Fette: Thank you so much for helping us understand a picture that can be very, very complicated to lots of us.
- 20:49Bernie Fette: We appreciate it.
- 20:50Brianne Glover: Thank you.
- 20:51Bernie Fette: Electric vehicles may hold promise to do wonders for the environment long-term.
- 20:59Bernie Fette: But some might argue that they're doing no favors for the roads and bridges that they travel on today.
- 21:06Bernie Fette: As they make up a growing share of the vast vehicle fleet that's out there, alternative fuel vehicles, exacerbate a widening gap between how much road funding we need and how much we have.
- 21:19Bernie Fette: Of course, that gap was there long before electric cars pushed the problem into sharp relief.
- 21:26Bernie Fette: The motor fuels tax for decades underwrote the interstate highway system along with so many state highways across America.
- 21:34Bernie Fette: It's primarily how we paid for the surface transportation that shaped our history.
- 21:39Bernie Fette: What remains to be seen is how we pay for the network that supports our future.
- 21:46Bernie Fette: Thanks for listening to Thinking Transportation.
- 21:49Bernie Fette: We hope you'll subscribe and share, and we hope you'll check in with us next time, when we visit with Senior Research Engineer Bill Eisele, and get a better understanding of how super-fast delivery is taking a toll on our roadway system and how free next-day delivery is anything but free.
- 22:10Bernie Fette: Thinking Transportation is a production of the Texas A&M Transportation Institute, a member of the Texas A&M University System.
- 22:18Bernie Fette: The show is edited and produced by C hris Pourteau.
- 22:22Bernie Fette: I'm your host and writer, Bernie Fette.
- 22:24Bernie Fette: Thanks again.
- 22:24Bernie Fette: See you next time.