Quick Note: Road Boondoggles

With all the focus on poorly done transit investment on this blog, it’s sometimes easy to forget that the primary source of US transportation waste is still roads. Consider for example the following projects proposed in Southern California, not all funded:

$1 billion fully funded for adding one carpool lane in one direction for 10 miles to the 405 through Sepulveda Pass; since the 405 will have to be closed for two days, this is locally dubbed Carmageddon. This is about $60 million per unidirectional lane-km, which is to my knowledge a record for above-ground highways.

$3 billion proposed for 4.5 miles of twin tunnels to complete a gap in the 710, of which $780 million is funded by Measure R, which generally funded transit projects. The cost, $400 million per km, is not high by global tunnel standards, but compared with the opportunity cost of building transit in the area, it’s enormous.

$4.1 billion for widening the 5 from 8 lanes to 12-14 for 27 miles, not yet funded. It’s about $18 million per unidirectional lane-km, a figure that’s cropped up elsewhere in the US and should be compared with about $15-80 million per double track-km for light rail, which has about eight or ten times the capacity per unidirectional track or lane.

Those projects are cheaper than the Big Dig or the Bay Bridge Eastern Span replacement, but also provide much less – two are routine widenings, and one is a minor tunnel. The point is that even small upgrades to road capacity cost as much as a major transit project.

The US road network has been a money sink going back to the first federal-aid highway act, in 1917. The reference here is 20th Century Sprawl, by Owen Gutfreund, who describes how motorist lobbies complained about license fees, fuel taxes, and other fees since the 1910s, and created road lockboxes for the revenue generated. Even though gas taxes were treated differently from cigarette and alcohol taxes, which do not go toward funding tobacco and distilleries, they were still not enough to pay for roads. In fact the only paid for about half the cost of highways, and there was a huge subsidy from gas tax-ineligible urban roads to the national and state roads.

The situation today is hardly different. Although proportionally there’s much less cross-subsidy than in the 1930s, due to the growth of suburbs connected by Interstates or other gas tax-eligible numbered roads, roads’ financial performance is still low. Under the fiction that local streets are paid by the tooth fairy, US roads are $75 billion a year in the hole: as of 2008, all gas tax and toll receipts are $122 billion, including the portion diverted to non-highway purposes, whereas total receipts to be spent on gas tax-eligible highways are $197 billion, including $4.3 billion spent on collection expenses. That’s 62% cost recovery.

It gets worse when one does a total lifecycle cost analysis and does not deed all local gas tax money to state highways: in Texas, the best-performing highways have 50% cost recovery, and most have much less. In Maryland, one transit advocate computed a 20% cost recovery for state highways, based on an analysis that treats most of the gas tax as just a sales tax on gasoline; but even if one considers the gas tax to be a user fee for roads, the extra money only raises cost recovery to 32%. Even tollways frequently lose money when interest on capital is included, and in one case even when interest is not included.

In other words, the entirety of the US road program is one giant money hole, of proportions that far exceed even the worst transit projects. I talk less about it because the best industry practice is to toll the roads and build far less of them rather than to control costs; there’s a good way to build a subway, but not to build 14-lane freeways.


  1. Joseph E

    The projects in Los Angeles, such at the 710 “LA Big Dig”, are a real shame, because they will waste Measure R sale tax revenue, which could otherwise be used for transit. Metro (the county-wide transportation and transit system, which also coordinates road-building) has long-range plans for a light rail tunnel under the Sepulveda pass, which would only cost about twice as much as this single car-pool lane that is currently under construction, but there is not enough funding in Measure R, yet. And plans for a subway extension south on Vermont, and subway extensions from Westwood/UCLA to Santa Monica, and thru West Hollywood, have been put on hold due to lack of funding, though they were in the EIR for the Westside subway.

    Every time we spend another $1 billion on a freeway widening or extension, that’s another few miles of subway or light rail or BRT that won’t be built.

  2. EngineerScotty

    It should be noted that the only reason the 710 is going in a tunnel is that the proposed surface route passes through a wealthy neighborhood in Pasadena, which has been able to oppose the bulldozer. It’s not as though the highway is passing under a body of water or a mountain, or some other difficult geography.

  3. Danny

    A few of the many reasons why the need to use taxes to fund transit is overstated (even apart from the productivity argument that I’m sure everybody is sick of by now). What is really needed is appropriate use taxes for roads.

    Just as a hypothetical scenario, imagine a world where the modal distribution is 95 automobile and 5% transit…and in the transit system load factors average 35%, but can break even at 70%. What this means is that if 5% of the population switches to transit from their cars, that transit breaks even (assuming no increase in capacity). This isn’t even a pie-in-the-sky scenario…mode shares and break evens tend to hover around these levels for US cities and transit agencies.

    Can a 25% increase in road fees (whether through tolls or congestion charges or gas taxes) accomplish that? 50%? What about a good 100% increase, moving us closer to full cost recovery?

    I think it would be more than enough, and there seems to be more than enough empirical evidence to prove so:

    Click to access transprev243.pdf


    • Alon Levy

      The question about this is where the increase in transit ridership would be. An increase in reverse-peak riders, as well as peak-direction riders who get off well short of the CBD, would be best; an increase in off-peak traffic would also be very good. In contrast, an increase in peak traffic would require an increase in capacity in many cases.

      On the other hand, in many metro areas, there isn’t much room for an extra increase in peak traffic, because transit already dominates the relevant market – parking is scarce, trains are more reliable since they don’t get stuck in traffic, and sometimes taking the train is even faster than driving on average. Nearly everyone who works in Manhattan takes transit, but higher gas taxes, congestion fees, and parking rates could significantly raise transit ridership to jobs in the Outer Boroughs and Newark, mostly piggybacking on existing capacity. Even Downtown LA workers have about a 50% transit share, about the same as Downtown Brooklyn. Very high gas prices could also encourage commuter rail ridership to edge cities, with employee shuttles providing the last mile; a few companies in Silicon Valley already do that, and something similar could happen elsewhere.

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  5. Steve S.

    It should also be noted that Americans have an aversion to tolling roads. American exceptionalism has basically made us tell international best standards in everything (except for planes, which facilitate international travel by their very nature) and stuff them.

    Soon a reckoning will come, and we’ll realize that we can’t afford to keep making roads big money pits, and we can’t afford to underinvest in trains and mass transit. Unfortunately, the “fiscal conservatives” have insisted on sticking their heads in the sand and refusing to acknowledge economic realities.

    Our roads–and by roads I mean limited-access highways–need to be either leased or sold off–to be, in other words, privatized. That would be a massive cash cow for the government and other investment starts during the privatization period. Once privatized, there would be relatively little oversight on user fees collection–most of the oversight would be focused on ensuring the roads are adequate to drive on. I have suggested before that if a road isn’t breaking even on toll revenue, that implies that it is undervalued and hence overutilized.

    When it comes to infrastructure policy, the American right shows blatant–and shocking–hypocrisy. U.S. Interstates are socialist by nature; they are treated as a common good rather than the expensive infrastructural luxury they are. The fact that the American right deliberately chooses not to comprehend this shows they are much more interested in throwing baseless insults around rather than actually doing anything about our looming problems.

    • Alon Levy

      The problem is that often the privatization deals are sops to the road industry. They aren’t always – in Indiana the government basically sold a road to private investors for twice what it was really worth – but in California those toll concessions come with non-compete clauses that forbid local governments from running any mass transit line along the same route.

    • liberal

      “Our roads–and by roads I mean limited-access highways–need to be either leased or sold off–to be, in other words, privatized.

      Right. So a private party can collect rents. A terrible idea.

  6. Carlton Glub

    Most cost estimates of the 710 tunnel seem to peg it over $5 billion.

    I’d like to see Metro/Caltrans just tear down the northern “stub” instead of continuing to fetishize connecting it to the 210.

  7. Michelle McDonald

    You should do a story alone on the proposed BIRMINGHAM NORTHERN BELTLINE. This zombie highway will cost taxpayers across the country $4.7 billion or $92 million per mile. Talk about a waste of money. The route was not recommended by the US EPA because it is the longest, most costly and environmentally destructive of all routes considered. It plows through drinking water sources (the CAHABA and BLACK WARRIOR rivers). Not to mention this boondoggle road has nothing to do with traffic and its sole purpose is to open up tracts of land to wealthy corporate landowners Drummond Coal and US Steel. It is receiving 34 percent of ADHS funding, more than any other project in the country. Read a recent article in the Black and White City Paper of Birmingham and you will see just how “dirty” this project really is.

    • Alon Levy

      You mean this disaster? Thanks for the alert. I just briefly Google Maps-toured a few other first-world metro areas with a million people, and no, none has both an urban through-route and a beltway composed of two complete bypasses. Calgary doesn’t; Honolulu doesn’t; Leipzig and Dresden don’t; Bremen doesn’t; even Fresno doesn’t.

      • Zmapper

        Calgary comes close, Honolulu is on an island so no through traffic, Leipzig has the city center in the way of the through highway, and Bremen has one traffic light in the way. I’ll give you Fresno and Dresden.

        Yes, I agree that the Birmingham sprawl-way is excessive waste. For 4.2 billion, how many new buses could Birmingham buy? What about transit lanes along major streets? Birmingham seems to be somewhat of a linear city so transit could work.

  8. Karl Tingwald

    Just so everyone knows, all of Measure R’s funding is set in stone – 15 percent of it for highways, if I recall correctly. This money cannot be used for transit. Although these projects seem like a boondoggle, they are far less harmful to the environment and will not induce as much sprawl as new freeways in greenfield areas like north LA County and the outer Inland Empire. In fact, the 710 tunnel, in my opinion, is one of the more effective freeway projects proposed in the United States. If properly mitigated, it won’t substantially increase sprawl and will improve the effectiveness of Los Angeles’ freeway system.

  9. ds

    “It should be noted that the only reason the 710 is going in a tunnel is that the proposed surface route passes through a wealthy neighborhood in Pasadena, which has been able to oppose the bulldozer. It’s not as though the highway is passing under a body of water or a mountain, or some other difficult geography.”

    I’m offended by that. It crosses through a relatively affluent neighborhood in SOUTH Pasadena (a separate city).

    The freeway through Pasadena was completed back in the 70s, and we built it the old fashioned way: by running it through the black neighborhoods. 14,000 people had to be relocated. A short “freeway to nowhere” stub of the 710 exists in Pasadena and runs down to the South Pasadena city line.

    Everyone in Pasadena wants the gap closed already.

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  11. JR

    The money does not go into a hole: it goes into somebody’s pocket. Every dollar spent by the government goes into somebody’s bank account. Follow the money trail is an immutable law of politics.

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