Fixing California’s Roads Could Hurt Auto Transporters
The state of California is known for its horrendous traffic congestion and the poor quality of many roads and highways that make up the state’s vast transportation network. This is a problem that the state has been working hard to fix, and while they’re doing a decent job in keeping things moving, but the average Californian spends 61 hours a year in traffic, wasting close to $1,300 per year in wasted fuel. That’s a lot of money over the course of a year – it’s about $100 a month, give or take. Governor Jerry Brown, in response to the growing problem, has told the new California State Transportation Agency to look into the problem and present sources of funding to help fix the roads. His proposals?
1. Increase the gas tax. Currently California residents are paying almost 42 cents in fuel-related state taxes and another 18 cents in federal taxes. This raises close to $10 billion a year for the state’s transportation network, but that’s not enough to cover all the work that needs to be done on California roads and bridges. The reason? Gas taxes haven’t kept up with inflation or the rise in demand of high-gas-mileage vehicles, and as such they aren’t as effective revenue-raisers as they once were. If gas taxes across the state were raised by a single penny, $160 million could be raised for the transportation department, while costing the average driver in California just $7 per year. That’s a small price to pay for better roads, but people don’t like tax increases, especially on something as precious as gasoline.
2. Introduce VMT Taxes. Oregon is playing with the vehicle miles traveled tax, a tax on individual vehicles that goes up based on how much you drive. The problem is implementing it, however, and it seems like this option will not be very viable; Oregon is apparently having problems with implementing a system of recording how many miles a vehicle is driven while trying to keep costs low, and that really isn’t working too well.
3. Add new toll roads. This probably would make motorists even more upset than the gas tax. Collecting tolls really doesn’t do much to mitigate congestion either, as anyone who has tried to get onto the New Jersey Turnpike can tell you.
There are some other options that they’re thinking about, but this blog is getting long enough as-is, so we’ll jump into the most important aspect of this: it’s impact on the auto transportation industry. Of the options that are currently being looked at, the most viable at the moment would be increasing taxes on gasoline. While an unpopular move with the people, most can afford a few extra cents at the pump, and it would go a long way to doing some good things with the roads. Auto transporters would feel these effects as well, though again it would not be a significant increase over what they are currently paying in fuel. VMT’s likely will not enter the system any time soon, but if they do there’s a whole nest of problems that have to be solved first. However, if it is introduced, auto shippers could end up paying more to operate in California, which would either lead to higher prices for customers or longer pickup windows as fewer carriers would be in California. Check out this article for more about this topic.