Talking Michigan Transportation

Fuel tax pauses, why U.S. transit projects cost so much, and EVs saving lives

March 31, 2022 Michigan Department of Transportation Season 4 Episode 98
Talking Michigan Transportation
Fuel tax pauses, why U.S. transit projects cost so much, and EVs saving lives
Show Notes Transcript

On this week’s Talking Michigan Transportation podcast, a semi-regular conversation with Lloyd Brown, formerly director of communications at the American Association of State Highway and Transportation Officials and now with the consulting firm, HDR.

Topics include:

Fuel tax pauses

Michigan Gov. Gretchen Whitmer’s veto of a bill to pause the state tax on gas and diesel fuel. Meanwhile, the governor signaled support for a temporary freeze on the sales tax on fuel.

Governors and lawmakers in several other states are implementing or debating similar measures, but Arkansas Gov. Asa Hutchinson said this week he would not support lowering his state’s 24.8 cent gas tax.

Transit infrastructure building costs

An in-depth look by Marketplace at the soaring cost of building transit infrastructure in the U.S. According to a 2021 Eno Center analysis, the U.S. spent an average of 50 percent more on a per-mile basis for both at-grade and tunnel transit systems than other peer countries. Highways and roads are costly, too.

From the story: “We do spend a lot more money here in this country, and it seems to be particularly acute in New York. But the kind of a cost per mile of building new transit, you know, is substantially higher than other developed countries with similar economies and democratic structures,” said Paul Lewis, policy director of the Eno Center for Transportation, a nonprofit think tank.

The reasons are many and varied, but one expert cites the attention to ongoing maintenance and rebuilding that is prioritized in other countries.

“In Paris, for instance, they’ve been continually building and improving and upgrading and expanding their [subway] system, you know, for about a century now. While in New York, we basically took 60 to 70 years off, and we’re not sort of maintaining our system,” Eric Goldwyn, assistant professor and program director of the transportation and land use program at NYU Marron, told Marketplace.

Electric vehicles (EVs) and saving lives

A major shift to EVs and a clean power grid in the U.S. could save tens of thousands of lives over the next few decades, according to a new report by the American Lung Association.

A story in The Verge says a drop in pollution from tailpipes and power plants would prevent up to 110,000 premature deaths by 2050, the report projects. It would also avoid 2.8 million asthma attacks and 13.4 million lost workdays. All in all, that would amount to $1.2 trillion in public health benefits. 


Jeff Cranson: Welcome to the Talking Michigan Transportation podcast. I'm Jeff Cranson.


Cranson: This week, I’m pleased to have with me Lloyd Brown, formerly the communications director for AASHTO, the American Association of State Highway Transportation Officials, and now doing communications work for the consultant HDR. He's working out of sunny Phoenix, and I’m always happy to have him on just to riff a little bit about various things going on in the transportation world. In Michigan, it's a big week. The governor formally signed a 4.7-billion-dollar infrastructure bill that is largely IIJA funds that were sent to Michigan, and incorporated by the legislature, and agreed to in a budget agreement between the governor and legislative leaders. And it is infrastructure in its broadest sense; it's not just roads and bridges—it's a little bit for rail, a little bit for aeronautics, and for water, and sewer, and broadband—all kinds of things. EV's are certainly very important to us right now, too, and we're going to talk a little bit about those later. And there are supposed to be some health benefits from switching over to EV’s. So, Lloyd, thank you for taking time again to do this. 

Lloyd Brown: Absolutely, thanks for having me, Jeff. 

Cranson: So, let's talk first about fuel tax pauses became a big thing a couple of weeks ago, everybody in politics looking for a way to show that they're gonna ease the burden on hard-working people's paychecks with gas prices for a while and just a steady ascent. They have stapled off, leveled off some, a little more stable. But some states are still going through with pausing their gas taxes, which is, you know, seems really like poor public policy to me given that just about every state is really struggling to fund basic maintenance of their roads and bridges.

 Brown: The concern, obviously, is that when you start cutting out your gasoline tax, and you don't have that revenue coming in for the maintenance and upkeep. But there's another part of it that, I think is, that most people don't understand, they just look at the bottom line and they think, oh yeah, well I'd like to give back, I’d like to get an extra 29 cents a gallon or whatever it is in my particular state and have that as a discount. The problem is that, so often, the people who are putting fuel in their cars, they're not seeing that discount given back to them. You know, it's not like it goes back to the consumer when you cut out the gasoline tax, and so I think that that’s a challenge. 

Cranson: Why is that? 

Brown: Well, most often, the gasoline tax is paid at the distributorship. And so, by the time the fuel makes it into the tank at the gas station, the tax has already been paid. So, in places, I know that was an issue. In Maryland, where it was going to be a fuel tax holiday for a couple of weeks, most of the fuel that was already in the tanks, when that went into place, had already paid the tax on it. So are you going to then give a discount to the gasoline distributors, who've already paid the tax, and how do you calculate how much fuel is in the tanks? It becomes administratively a bit of a challenge. And ultimately, that does get out there to the individual gas stations, but it's not an immediate thing because the tax is actually paid when the fuel is being distributed out to the stations. 

Cranson: So in Michigan, some lawmakers pushed for that plan. And either on purpose, or because of some poor judgment and a mistake, what they ended up signing wouldn't take effect until 2023. Which sounds like a million years away to me right now, the way things are going. But surprisingly, maybe not so surprisingly, Asa Hutchinson, very conservative governor and very conservative Arkansas, said no to a proposal there to pause the gas tax. And they have one of the lowest fuel taxes already. You probably saw that news I’m guessing? 

Brown: Yeah, I did. And also, I think in California, there was a move to, instead of doing a gas tax holiday, to actually fine fuel distributors that are gouging consumers. So it's taking that whole idea of, okay, you're not giving the break to the consumer, but you're turning around and holding the fuel companies, the gasoline companies, accountable for running up prices on people in a situation where maybe there's uncertainty in the marketplace. 

Cranson: And I saw that, but what I didn't see was any in-depth explanation of how they do that kind of investigation and enforcement in a hurry. 

Brown: Well, that's been, traditionally through the years, you've been around the transportation world long enough, Jeff, you've seen that a few times where gas prices spike and then there's a question about, well, let's investigate the fuel companies and see about how they're maybe gouging or running up the prices. And it never comes to anything, it's very difficult to prove, so. But the point, I guess, from that, whether it comes to fruition or not in California or anywhere else, is the fact that they're turning that around and saying the issue isn't about the gasoline tax, the issue is about how do we manage prices in a way that people aren't seeing these exponential increases overnight at the fuel pump.  

Cranson: So, Michigan's Senate Democratic leader, minority leader, Jim Ananich, he's from Flint, and he put in a bill that would pause instead the sales tax on fuel and use some surplus funds in the budget to backfill that because that money goes mostly to education and some revenue sharing for cities and villages. Makes a lot of sense because that one is misunderstood by people, and because gas spiked so high for that period of time, it was kind of a windfall, that six percent sales tax. Those institutions got a lot more money than they normally would have. So, there's all kinds of logic to this. I say this as the advocate for transportation, but, you know, believe it or not, I do care about education, too. So, that's a huge thing in Michigan, and I don't know if any of the places you worked you ever dealt with the sales tax on fuel, but it creates a tremendous confusion because we're so often compared to our neighboring states. Ohio actually has 10 cents higher fuel tax than Michigan does, and 20 cents higher diesel fuel tax. And yet, it doesn't seem like you're paying any more there because they don't assess the sales tax on gas. And I’m constantly trying to educate reporters and people about that and how, yeah, you can say this is what gas costs in Michigan, but you should know in terms of what goes to the roads, it's not all of that. So, I don't know, what's the ideal here to make people understand how much it costs to fix the roads? And what you pay at the pump is a lot of it. And maybe just quit obsessing about it because it's the only thing you buy that you see the price on every street corner. 

Brown: Well it strikes me that, isn't it interesting, or might it be interesting now, for those people who are concerned about a mileage-based user fee. You know, in a situation like this where fuel prices are shooting up, or going up, or increasing, if you had a mileage based user fee across the board, it would be a more stable form of revenue for the highway trust fund that wouldn't be necessarily tied to the price of gasoline. It would just be a fee that would be set, and it would increase whatever rate that the people in charge determine. But it wouldn't be tied in with the with the gasoline, you know, the gas station on the corner basically and that's— 

Cranson: User fee.  

Brown: Yeah, it's a direct link to the user fee. And I guess what prompted that observation is that your question is, “what's sort of the right mix”. And I think that helping people understand that that gasoline tax, per gallon gasoline tax, is the closest we've come so far to a real user fee on the system. And it's something that's been in place for a long time. But every state does it a little bit differently. You just described in Michigan, there's a sales tax that's associated along with the fuel tax. In other states, there's higher registration fees, and other states there's different other forms of fees and taxes that go into paying for transportation. So it's complicated, and not every state depends so strongly on gasoline taxes. 

Cranson: Well, let's talk then a little bit because you flagged this story for me. Very interesting story that marketplace did on the cost of transportation; this was specifically about transit, although, it did get into to roads a little bit, too. But, it's kind of shocking numbers that they threw out there in terms of the cost per mile of building something related to, you know, what the subway system in New York or anywhere in the U.S. compared to projects in Madrid and in Paris. And they came up with some decent answers as to why it is, and why it costs so much. But what was your takeaway from that story? 

Brown: Well, I think one of the strongest observations was the professor from NYU who studies these issues and compares different costs around the world. And what he observed is that, in France and Paris, they've been building out and improving their subway system really non-stop since they first built it. And so, they're constantly working on it, and expanding it, and building it out, and making sure it's maintained well. Whereas in the United States, we build it, and then we kind of walk away from it. And say— 

Cranson: And what did he say, we took like 70 years off.  

Brown: [laughing] He said 60 to 70 years off. We built the New York system and then didn't go back into the city of New York to do any sort of major improvements for another 60 or 70 years. 

Cranson: Would you get numbers similar in D.C. where you were a frequent metro user? 

Brown: I’m not sure it was as long, because I think large portions of the WMATA system there in D.C. were built out in the—I think it was the 70s and in the 1980s, but the 70s for sure. But then there were new extensions being completed just within the last, the silver line was just opened up within the last 10 years, which is another piece of that. So, I’m not sure what the numbers really are in terms of the years, but yeah, I think there are gaps. And in the United States, let's take WMATA for instance, they're building out the silver line while in other portions of the system the escalators don't work, and the rail cars are catching on fire, so. 

 Cranson: Taken all those stairs a couple of times. 

Brown: Yes, absolutely. Me too. 

Cranson: We will continue the conversation right after a quick break. 

Narrator: Hey, did you see that sign on the side of the road? What about those workers? Are you even paying attention to how you're driving? Work zone awareness takes all of us. 

Cranson: So what, I mean, what's your theory after living in D.C. for a while, and dealing with this, and working for an organization that was lobbying congress trying to help new members understand funding, and why it’s so hard? Why is it different in European countries and in Asian countries, and really just about anywhere else? But, the mindset here is, like you said, it's like, well, we built it and there wasn't a sense of ownership from the start that this is going to cost a lot to build, but it's also going to cost a lot to maintain. 

Brown: Well, I think that one of the things that we do here well in the United States is process. And we certainly, we do a public involvement process, we do the environmental process—that has a public involvement process as part of that, and there's the engineering processes. And when you begin to link all of these things together, there—one, it takes a lot of people power to get through the plans, and the studies, and the designs. The other thing is, people will go in and they'll buy. They'll go in ahead of development. I’ve seen this happen in in my home state of Washington state; when we knew that there was a highway expansion that was on the on the plans, people went in ahead, and they bought the land ahead of it, and then all the sudden the land became more valuable. And so now you're negotiating with higher real estate. There's just so many reasons why, but I think process is a big contributor. One of the items that's cited in the story, the marketplace story, was that in New York, the subway that they wanted to put these screens on so that they matched up with the doors of the subways to keep people from falling onto the tracks, and they realized that with all the different versions of the rail cars, that none of the doors lined up and opened at the same spots, so. 

Cranson: And it costs a hundred million dollars. 

Brown: Yeah, so. 

Cranson: Yeah. But, you know, I think it goes deeper than that, and I think it's cultural. And not that this hasn't slipped into European countries, but the ongoing erosion of faith and trust in our most basic institutions in this country: government, religious organizations, the rotary club. It goes deep and it creates a suspicion, and it just plays to that inertia to never support tax increases. And, you know, as we talk about all the time in transportation, you can call them taxes, but really they're user fees. And the best structures are set up as user fees. And we've created a whole couple generations of people that don't think that they should have to pay anymore. But they want convenience, and they want the best of everything. How are we going to snap out of that, Lloyd? It's up to you to tell us. 

Brown: Well, Jeff, you've got a head start on me thinking about that, so I’m not sure I’ve got much more I can throw at it. But I think you're right, there is a sense that, you know, we want our system to work and function at its highest and most efficient levels, but we want also then to not have to pay a premium for that. And so, how do we make that work? I know that there's a lot of really smart people around the country that are grappling with that every single day, and that I don't see a ready answer to be honest with you. 

Cranson: Well then, let's take on something that maybe there's some shoots of hope here. That verge story that we talked about, citing the American Lung Association report, saying basically, that a major shift to electric vehicles and clean power grid could save tens of thousands of lives over the next few decades. Now, I think you'd be quick to point out that even if we reduce tailpipe emissions greatly, which is what EV’s promise to do, it's still about the sources of the energy that fuels those batteries. What's your take on that? 

Brown: No, I think that's exactly right, and as much as we've seen the major automakers commit to and begin to really seriously deploy electric vehicles—and we're going to see a proliferation of those over the next four or five years—right now they make up such a small percentage of the overall light duty fleet, which is your basic general purpose cars and SUVs. When people say we're going to increase by 50 percent or 75 percent, they're still just really small numbers. So, it's going to take a little while before the EVs are really out there, and the fuels, the charging stations, are all deployed. But, the recent IIJA, the federal program that congress passed, is going to put a lot of money toward that. And I know states are working on plans around the country to figure out where the charging stations need to be, and maybe what some of those standardized plugs need to look like, and some of those sorts of things. So, we're making progress, I think we're going in the right direction, but it can't just be, we can't just hang our hat that electric vehicles are going to solve all of our air quality problems right away. 

Cranson: Yeah, it's a lot of things, but I thought it was interesting that they took a look at that, and they said just the drop from tailpipes alone could prevent up to 110,000 premature deaths by 2050. That's a lot, you know, and with what we saw for a long time in our in our cities, especially the increasing rates of asthma, especially among otherwise underrepresented communities, minority communities, that tended to live in those areas. It’s shocking. So, if we're not going to move away, as some people would advocate for multi-modal transportation, if everybody's not going to be taking a train, or a bus, or a scooter, or biking to work, the shift to electric vehicles itself has to make a huge difference. 

Brown: You know, I was driving along through a college campus this weekend, and I looked over on the sidewalk, and there was one of those little electric robots that had probably pizza or sandwiches in it that was rolling to a dorm room. And I thought, that just took a vehicle, you know, back when, 35 years ago when I was in college, that was somebody in an old Toyota Celica that was running around delivering pizzas, probably with half the tailpipe hanging off and everything else. So, while I have issues with robots on sidewalks sort of generally, those sort of recurring trips—we're figuring out ways to maybe eliminate some of those with drones, and with these robots, and some of those other things. And I think that ultimately, it's going to start contributing to some of the reduction in emissions as well at some point. 

Cranson: Yeah, but when you were in college, depending on the time of night, don't you think there would have been people that grabbed that pizza before the robot could make its delivery? 

Brown: [laughing] Yeah. Yeah, where I went to school, for sure, absolutely. 

Cranson: Well thanks, Lloyd, anything else you want to touch on in our semi-regular free-flowing transportation discussion? 

Brown: I think that, even in the electric vehicle space, that there are going to be people who benefit over other people. I think there's always going to be a diversity, equity inclusion sort of lens for these sorts of things. So, for instance, I was reading an article yesterday about these new vehicles that can charge your home, basically, when the power goes out. So people aren't building, and they can, so you charge them at night.

 Cranson: So your car becomes a generator. 

Brown: Yeah, your car becomes a generator. So one of the usages that they're envisioning is, you charge your vehicle overnight when the energy cost is less, and then during the day, it trickle feeds back into your home during the day when prices are higher. Well, people who don't have electric vehicles or don't have that additional feature on their cars will not be able to take advantage of that. So, that means they'll end up paying a higher price than those people who have this extra device. So, there's always going to be some sort of perspective on this where we've got people who are figuring out ways to sort of reduce costs and get by less expensively, and other people who are maybe going to be left behind. I think we've always got to think about that when we're deploying technologies is, what is going to be the larger implication and larger impact on the broader system, and how it relates to all people. 

Cranson: Yeah, I think the forward thinking, truly progressive people that are thinking both about EVs and AV technology and automated vehicles, and when we get to the point where there are dedicated lanes for automated vehicles, how are you going to make that accessible to everybody? And I know it's something that secretary Pete has talked about and is cognizant of; I'm not sure how much is in IIJA that really addresses that; but you're right, that's going to be a huge issue going forward. I think part of what you're getting at, right, is that it's one thing to incentivize people to charge at night, but those people are probably the ones that have to work at night, so.  

Brown: [laughing] Yeah, exactly. Good point, absolutely. 

Cranson: Well thanks, Lloyd. Good discussion as always, I appreciate it. 

Brown: Absolutely, Jeff, have a great day. 

Cranson: You too.  


Cranson: Thank you again for listening to this week's edition of the Talking Michigan Transportation podcast. I would like to thank Randy Debler and Corey Petee for engineering this week's podcast. To subscribe, to show notes, and more, go to Apple podcasts and search for Talking Michigan Transportation.