Can road repairs ever pay for themselves?
It’s no secret that America’s roads need fixing. Of the nation’s highways, 17.4 percent, or some 164,000 miles, were in poor or mediocre condition in 2008, according to the Federal Highway Administration. They needed repaving or more substantive repairs. But how big a deal is this, really?
Here’s one way of looking at it, courtesy of Bloomberg’s Andrew Zajac. Poor roads increase the cost of owning a vehicle. They can tear up suspensions, wear out tires prematurely, and increase fuel consumption. The numbers are fairly dramatic. Careful modeling work by Karim Chatti, an engineering professor at Michigan State University, has found that poor roads cost U.S. drivers an extra $15 billion to $25 billion each year in vehicle damages. (Other groups have pegged the number even higher, at $49 billion per year.)
To put that number in perspective, the House and the Senate are currently wrangling over a two-year transportation bill. One of the big sticking points is that the gas tax doesn’t raise enough money to cover the nation’s transportation needs. There’s a shortfall of about … $15 billion per year.
This suggests that drivers could, conceivably, recoup at least a portion of the costs of a higher gas tax if the money was used to fix and repave current roads. Gas taxes go up, vehicle damage goes down. Everyone’s happy. Right?
Except that’s a big “if.” Right now, most transportation money isn’t actually used to fix existing roads and highways. Politicians always prefer to build shiny new roads — there’s a big ribbon-cutting, and drivers don’t get inconvenienced by orange cones and repair crews. Currently, 57 percent of all state highway funding goes toward new construction, even though this represents just 1.3 percent of the overall system.
UCLA economist Matthew Kahn and the University of Minnesota’s David Levinson have made a more detailed case for a “fix-it first” strategy for transportation spending in this paper. Right now, they note, federal highway spending doesn’t usually get subjected to a strict cost-benefit analysis, and there’s usually pressure to build new roads and bridges rather than maintain existing ones. What’s more, Kahn and Levinson find, this doesn’t make good economic sense — it’s usually much cheaper to fix a road earlier on than to wait for it to deteriorate into “poor” or “serious” condition.
The Senate’s version of the two-year transportation bill would try to change this. It requires states to spend at least 60 percent of their funds on highway repair. The Department of Transportation would also establish “minimum condition” standards for roads, with states facing penalties if their roads fell into decrepitude. These changes wouldn’t reverse the bias toward new road construction, but they would begin a shift. (The House transportation bill does not have these requirements.)
If Chatti’s research is correct, these sorts of “fix-it first” tweaks could save drivers more money in the long run. Of course, they wouldn’t be good news for everyone. As Bloomberg’s Zajac reports, Washington D.C.’s auto repair shops are quite satisfied with the current state of affairs. “I can definitely tell you that bad roads cause extra damage to cars,” says one mechanic, happy that business is booming.