A real conservative starts any discussion about a very expensive proposed public project with a few questions: First, how much will it cost? Second, how will we pay for it?
In trying to answer those questions about the planned refurbishment of the Hoan Bridge, the WisDOT staff have estimated the repairs will cost between $275 million and $350 million. A fiscally conservative taxpayer would err on the high side, so we will say $350 million. But wait, is that the total bill? What about the current $7 million in repairs? And what about the repairs last year? And don’t freeways need to be resurfaced ever 10 or 15 years? How much will all that ongoing maintenance cost? Let’s estimate answer to the first question is that the total project cost will be $450 million. To keep things simple, lets assume the bridge lasts for 45 years, which means the Hoan costs the taxpayers $10 million a year.
Now that we know the total cost of the proposed project and the future costs, any custodian of the public trust would let the taxpayers know how the project will be funded. With freeways, the answer is simple, the federal highway trust fund, or the gas tax. In theory, every person who drives over that 2.5 mile long bridge pays for that privilege when they fill up at the pump, to the tune of 18.4 cents per gallon thanks to the federal gas tax. Theories are nice, but a conservative always says “show me the money.”
How much do those 40,000 taxpayers driving over the Hoan Bridge every day actually kick into the kitty? The math on this is pretty simple. We multiply the number of vehicles crossing the bridge per day by the length of bridge. Then we divide that amount by the average fuel economy of those vehicles; multiply times the federal gas tax per gallon and finally multiply that number by 365 days in a year. Voila’, we have just calculated the amount of gas taxes the Hoan bridge generates each year and we can determine if we can afford to do the project.
So we have the following:
40,000 * 2.5 miles / 20mpg* .184 * 365 = $335,800
All right, now let’s run this past the general taxpayer expected to shoulder the cost of the project. It is going to cost $10 million per year to pay for the Hoan over the useful life of the bridge, but the bridge only brings in $335,800 a year. Hmm, it seems we are a bit short here. Where can we find some more money? I know, maybe we can use State gas taxes and the sales tax on gasoline too. Those add up to an additional 37.9 cents per gallon. Let’s count our pennies now:
Really, we are still about $9 million a year short? That means that we are about $400 million short of the $500 million the bridge will cost us. Where can we find some more money? What about the miles of road that lead up to the bridge on the Lake Parkway (I794)? Maybe drivers are overpaying there and that will subsidize the bridge. The Lake Parkway is 4.75 miles long and cost $130 million to build. Lets add another $30 million for maintenance over the future life of the Parkway. At grade freeways need to be completely reconstructed every 30 years or so, so the annual cost to taxpayers is about $5.3 million a year.
Now lets see if it is generating some extra cash we can put toward the Hoan project:
Nope, no extra money there, in fact it doesn’t even pay for itself. This is just a simplified way to look at the concept of asset value indexing for road projects. 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 Texas DOT created a much more rigorous Asset Value Index program and evaluated all the roads in Texas. They found that there is not one road in Texas that comes even close to paying for itself. They concluded that gas taxes only cover about 32% of the cost of roads and highways. TxDOT was using the study to argue for increased use of toll roads.
In fact, all roads in Texas, Wisconsin and everywhere else for that matter are subsidized by non-user taxes. According to the Federal Highway Administration, the Highway Trust Fund only covers about 50% of the cost of highways.
OK, so what is the point of all this depressing talk about underfunded transportation systems? The point here is that since the Hoan gas taxes won’t come close to paying for the Hoan, it is no more fiscally “liberal” to suggest that we add value to the project by including a bicycle and pedestrian accommodations, like every other landmark bridge in the Country. Since we can get a huge return on a very small investment, about 1% of the total project cost, it would be fiscally irresponsible not to try to add value to this underfunded, under-utilized highway project.
So say it with me and say it to your elected official: One Percent to Walk and Bike the Hoan!