Quick!  Raise your hand if you like these high gas prices!  Anyone?  Okay, okay -- now raise your hand if you would be willing to commit to these high gas prices if bumping over a pothole was such a rare occasion that, when it did happen, everyone in the car would go, “What the heck was that?”  I bet you had to think about that one a bit more.

I’m sure we would all love to go back to cheap gas and have roads that didn’t look like we live in a permanent war-zone, but Maryland faces a $40 billion backlog of recommended-yet-unfunded infrastructure improvements; much of that needs to be spent on roads and bridges.  I’m not sure that’s realistic anymore.  Still, what if we could at least get something out of our $50 to $100 fill-ups besides a mixture of gasoline and corn?

If you live in Baltimore City, you are already well-aware of how bad the roads have gotten, but the problem is felt statewide.  In fact, the poor condition of our roads (and the congestion in bottleneck areas) is costing the average Maryland drivers an extra $2,200 in annual maintenance and gas.

At $4 a gallon, I could buy 550 gallons of premium gasoline with $2,200.  My car gets a little over 25 miles to the gallon, which means that 550 gallons would take me almost 14,000 miles.  That’s about twice what I drive in a year (working from home has its perks), but slightly below the average for most American drivers.

Despite what you may have heard, only 42 cents of the price of a gallon of gas goes to the government (assume about a 50-50 split between state and federal to make things simple).  At these prices, that’s about 10.5% of the price of gas -- the same as the oil companies’ profit margins.  But if prices fell back to around $2/gallon thanks to expanded drilling or decreased demand then the government’s share would double.  And if we then raised gas taxes (as we’re considering doing in the fall) it would rise even higher than that.

The question is: how much money does the government need to get from taxpayers per gallon before they start checking things off the $40 billion list?  For that matter, how much are they getting right now? 

Let’s see:

·         The average driver puts 15,000 miles on their car per year.

·         There are 3, 552,187 licensed drivers in MD.

·         3,552,187 drivers multiplied by 15,000 miles per year means a total of 53,282,805,000 miles driven annually in Maryland.

·         The average fuel economy in America is 17.1 mpg for passenger cars and light trucks.

·         53,282,805,000 annual miles divided by 17.1 miles per gallon equals 3,115,953,509 gallons burned per year.

·         3,115,953,509 gallons multiplied by the combined federal/state taxes of 42 cents per gallon means $1,308,700,472.52 going to the government every year.

·         Add to that the money from tolls and vehicle registrations and we can hopefully say that the government is getting somewhere in the neighborhood of $2 billion per year from Maryland drivers.[1]

Not exactly on track towards earning $40 billion anytime soon, are we?  But let’s pretend that our federal government took the steps necessary to reducing the price of oil back to $2/gallon.  And then let’s suppose that they ratcheted gas prices back up to $4/gallon entirely with taxes.  That would be an extra $1.58 per gallon on top of the previous 42 cents.

The result?  An extra $4,923,206,544.22 per year to be spent on transportation infrastructure in this state alone.  We’re talking somewhere in the neighborhood of $7 billion each year to fix our roads, expand our highways, and maintain our bridges.  That would bring our backlog of unfunded projects under control pretty quick.  And all our government would need to do is find ways to reduce the price of oil.

Of course, we don’t have to do this quite so quickly.  We could increase gas taxes less dramatically and accrue revenues slower.  Even $3/gallon gas (with $1 of that being taxes) would give us over $3 billion per year from gas taxes alone.  As long as we could commit to spending that entirely on infrastructure (and not looting it for the General Fund as has been our custom recently), I think that would be a policy change that could gain support from both sides of the political spectrum.

Please note:I am not trying to convince you that high gas prices are "no big deal" or that we should all petition the government for higher gas taxes.  I am simply trying to show that there are alternatives to the situation we find ourselves in now (namely: paying $4/gallon to drive on terrible roads) and that there are legitimate reasons for taxation.