Funding roads (taxes, user fees etc)

[tomh009]

As people move to electric vehicles, though, the governments will need to move from fuel taxes to an alternate funding source. Unless roads are to be financed completely from general tax revenue in the future.

[danbrotherston]

As people move to electric vehicles, though, the governments will need to move from fuel taxes to an alternate funding source. Unless roads are to be financed completely from general tax revenue in the future.

A complete loss of the gas tax would only be a small shift in road funding.

[MidTowner]

Yes- people seem to think the gas tax is really high (sometimes I quiz people who are complaining about it, and I've never met someone who knows the rate off the top of their head) and that the province collects billions from it. It is billions, but only about two of them.

The tax hasn't been raised in 26 years, so has fallen by at least a third in real terms. Combined with more fuel efficient vehicles, the gas tax is a screaming deal for drivers compared to a generation ago.

[robdrimmie]

Yes- people seem to think the gas tax is really high

I suspect this is part of the campaign from oil companies when gas prices really started to go up. My perception of time is bad, but those stickers on pumps with "look how much of all of this is taxes" started showing up in the aughts or something like that? And I believe there were radio campaigns around that time as well. It's the sort of shorthand comment that compounds into perceived reality very quickly.

[panamaniac]

I find it unfortunate that the government did not raise gas taxes when oil prices fell a couple of years ago.

[plam]

I find it unfortunate that the government did not raise gas taxes when oil prices fell a couple of years ago.

The BC government did. Ours didn't.

I think that's a fundamental argument against road taxes being perceived as user-pays. We have no idea how much we pay in gas taxes. "A lot" isn't a very good answer and perhaps inaccurate these days. But who knows? On the other hand, we know very much how much we spend on transit.

[tomh009]

As people move to electric vehicles, though, the governments will need to move from fuel taxes to an alternate funding source. Unless roads are to be financed completely from general tax revenue in the future.

A complete loss of the gas tax would only be a small shift in road funding.

$2B is still a substantial hole in the budget. Also, financing that from HST or income taxes would completely divorce the usage from taxes (which may or may not be a good thing).

But regardless of where the money will come from, there will need to be an alternate funding source for the current $2B, because the need for road construction will not disappear with the advent of EVs.

[MidTowner]

I wouldn't call $2 billion a substantial part of Ontario's $130 billion budget. But it's true that it will have to be replaced, somehow, and I think that a distance tax is probably inevitable. I imagine that, in most places, it will replace the gas tax revenue and then some.

[panamaniac]

I wouldn't call $2 billion a substantial part of Ontario's $130 billion budget. But it's true that it will have to be replaced, somehow, and I think that a distance tax is probably inevitable. I imagine that, in most places, it will replace the gas tax revenue and then some.

Hey!  A billion here, a billion there - after a while it starts to add up! 

[danbrotherston]

I wouldn't call $2 billion a substantial part of Ontario's $130 billion budget. But it's true that it will have to be replaced, somehow, and I think that a distance tax is probably inevitable. I imagine that, in most places, it will replace the gas tax revenue and then some.

Hey!  A billion here, a billion there - after a while it starts to add up! 

But the point is, it only adds up to two.  

Also, that's 2b out of 130b of Ontario spend, municipalities spend at least that much again.  It's actually a very small fraction of total government revenues in Ontario.

[tomh009]

I wouldn't call $2 billion a substantial part of Ontario's $130 billion budget. But it's true that it will have to be replaced, somehow, and I think that a distance tax is probably inevitable. I imagine that, in most places, it will replace the gas tax revenue and then some.

Of total, no. But add $2B to the budget deficit, and it's much less good.  Patching it with HST would require an increase in the provincial portion from 8% to 9%, for example.

[MidTowner]

I wouldn't call $2 billion a substantial part of Ontario's $130 billion budget. But it's true that it will have to be replaced, somehow, and I think that a distance tax is probably inevitable. I imagine that, in most places, it will replace the gas tax revenue and then some.

Of total, no. But add $2B to the budget deficit, and it's much less good.  Patching it with HST would require an increase in the provincial portion from 8% to 9%, for example.

Right, that's true. It would mean increasing the deficit by 20% (or thereabouts- obviously the deficit fluctuates year to year). It's definitely true that that revenue will have to be replaced, somehow.

[danbrotherston]

Of total, no. But add $2B to the budget deficit, and it's much less good.  Patching it with HST would require an increase in the provincial portion from 8% to 9%, for example.

Right, that's true. It would mean increasing the deficit by 20% (or thereabouts- obviously the deficit fluctuates year to year). It's definitely true that that revenue will have to be replaced, somehow.

This isn't the point though, at least not my point, we're considering how much the gas tax contributes, because it is the only money that could even be considered a user fee for roads.  

The same thing applies to cutting transit fares to zero.

By the way, it's worth noting that gas tax revenues are going to zero in the next ... maybe 30 years or so, given that electric cars are likely to be rapidly overtaking gas cars.  Unlike transit fares, which will probably remain, and drivers will continue to whine about how much they're subsidizing transit riders.

[ijmorlan]

Yup, you’re wrong. And you would be well advised to avoid accusations of dishonesty in a discussion without clear and specific evidence. Just some free advice on getting along with people from a non-expert on the topic.

I genuinely believe you know you're lying when you make statements like that.  So I'm not going to sugarcoat it.

I await with interest your ravings on the topic of why you think I am lying about this. Is somebody paying me? Am I an alien representative? Am I conducting an experiment on this particular message board for some reason? If you’re that sure, you must have at least a couple of potential hypotheses. Please don’t disappoint us. I don’t laugh enough most days.

[NotStan]

Right, that's true. It would mean increasing the deficit by 20% (or thereabouts- obviously the deficit fluctuates year to year). It's definitely true that that revenue will have to be replaced, somehow.

This isn't the point though, at least not my point, we're considering how much the gas tax contributes, because it is the only money that could even be considered a user fee for roads.  

The same thing applies to cutting transit fares to zero.

By the way, it's worth noting that gas tax revenues are going to zero in the next ... maybe 30 years or so, given that electric cars are likely to be rapidly overtaking gas cars.  Unlike transit fares, which will probably remain, and drivers will continue to whine about how much they're subsidizing transit riders.

It's pretty much a lock that as the amount of tax raised from gas drops there will be a tax on electric vehicles to fill that gap.