Are Toll Roads even needed? By Bill Barker

Statement by Bill Barker, AICP at the San Antonio-Bexar County MPO June 26, 2006

Mr. Chairman and members of the Transportation Policy Board, thank you for allowing me to speak to you. In 1980, I spoke at the national conference held in San Antonio addressing this issue in response to the gasoline shortages of 1979.1

Data from the Federal Highway Administration shows that vehicular travel on all roads in the U.S. in April 2006 was down from April 2005.2 This is the second year in a row that this has occurred in spite of population growth and economic expansion.

Economists tell us that, over a short period measured in months, every 10% increase in the price of gasoline results in about 1.6% reduction in gasoline consumption.3

Given a longer period of time, say 15 years, the same 10% increase in the price of gasoline will result in a 4 to 10% reduction in consumption. Thus, gasoline consumption can be expected to be dampened by about 20 to 50% over what it would have been over the next several years due to the 54% gasoline price increase we have already seen from April 2004 to April 2006. 4

Currently, the U.S. is running ahead of conservative projections by CIBC World Markets5 which show U.S. gasoline prices to climb to the $4.00 level by the year 2010.

Longer term responses to price increases are greater because households and businesses have more options – like moving. For example, friends of mine recently moved from Encino Park beyond Loop 1604 to the inner city Jefferson neighborhood and reduced their driving and gasoline consumption by two-thirds.

Per capita gasoline consumption in San Antonio is 19% higher than the average large U.S. city.6 Because of this, and the relatively low personal income level here, the September Forbes magazine listed San Antonio in the top 10 cities hardest hit by gasoline price increases.7

While other U.S. cities have successfully pursued policies to reduce petroleum dependence, with a few exceptions, San Antonio has done the opposite.8

$115M was spent by San Antonio households and businesses in 2005 on Middle Eastern oil for transportation.9 This money leaking out of local circulation for imported oil reduces the region’s economic multipliers.10

Besides weakening our economy, higher gasoline expenditures put us at a competitive disadvantage with other, more fuel efficient, cities around the world.

Because rising fuel prices increase the cost of transportation projects, cost-benefit ratios must be re-examined. As the price of transportation increases, development patterns and travel behavior change, and funding from motor fuel excise taxes and, to some extent sales taxes, is lessened.

I encourage you to thoroughly examine this issue. Thank you for listening.

1 Transportation Research Board conference held April 13-16, 1980.

2 April 2006 was down 0.4 percent compared with April of 2005. Similarly, vehicular travel in April of 2005 was 1.3 percent lower than April of 2004. Traffic Volume Trends April 2006, Federal Highway Administration, June 2006.

http://knowledge.fhwa.dot.gov/cops/hcx.nsf/All+Documents/D49C17B8D7407A13852571930042C3FA/$FILE/MonthlyReport42006.pdf

3 Charles Komanoff, Gasoline Price-Elasticity, May 30, 2006, http://www.vtpi.org/gasoline_elasticity.xls

4 The average retail price of regular unleaded gasoline in the U.S. went up from $1.81 per gallon in mid-April of 2004 to $2.78 per gallon in mid-April of this year. http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_history.html

5 Jeff Rubin, “Not Just a Spike,” Occasional Report #53, CIBC World Markets, Toronto, Canada, April 13, 2005. http://www.odac-info.org/bulletin/documents/NotJustASpike.pdf

6 “Who drives the most and the least among large U.S. metropolitan regions?” Commentary by Robert Dunphy, Urban Land Institute, (http://experts.uli.org/Content/ResFellows/Dunphy/Dunphy_C09.htm)

7 Sara Clemence, “Gas Crisis Cities, “Forbes, September 29, 2005, http://www.forbes.com/finance/2005/09/29/gasprices-cities-driving-cx_sc_0930home_ls.html

8 Naomi Friedman1, Energy and Smart Growth: It’s about How and Where We Build, Translation Paper Number Fifteen, Funders’ Network for Smart Growth and Livable Communities, 2004. http://www.eesi.org/publications/EnergyandSmartGrowthPaper.pdf

9 Environmental Working Group, “Stuck in the Sand: How Trillions Spent on Highways Keep America Dependent on Middle East Oil,” http://www.ewg.org/reports/stuckinthesand/execsumm.php

10 Jon R. Miller, M. Henry Robison, and Michael L. Lahr, Estimating Important Transportation-Related Regional Economic Relationships in Bexar County, Texas, Economic Modeling Specialists, Inc. for VIA Metropolitan Transit, San Antonio, Texas, October 1999 http://www.vtpi.org/modeshft.pdf