Imagine we in San Diego County had $2 billion to spend every year — that’s $5.5 million a day, including weekends and holidays — to help relieve traffic congestion, rebuild the urban infrastructure and lessen the impact of global warming. We could do a lot.
Or, imagine we leveraged that annual revenue to generate a massive $25 billion to invest up front in a new green and sustainable infrastructure for the 21st century. We could rebuild San Diego to get our homes closer to our jobs, reduce greenhouse gas emissions and bring a higher quality of life to our neighborhoods. We could even expand on ideas used in other cities such as bicycle zones and universal broadband access to increase telecommuting.
Unfortunately, we don’t have that $2 billion per year, and it’s our own fault. It’s clear — with gas prices heading toward $5 per gallon — that high prices are finally causing us to drive less, buy smaller cars, carpool more and use more mass transit when possible. If U.S. gas taxes were at levels comparable to the rest of the industrialized world, we’d have the same impacts on reducing gas consumption, but we’d also have the money we need to create transportation alternatives. Total federal and state gas taxes paid by American consumers are about half the rate Canadians pay and a third of European rates. Each penny of federal gas tax translates into about $1.3 billion in revenue per year.
San Diego County uses about 5 million gallons of gasoline per day, or nearly 2 billion gallons a year, according to the San Diego Association of Governments. That means the additional $1 per gallon we’re paying now could be generating $5 million per day and $2 billion per year for public investments to reduce our dependence on foreign oil instead of funding the oil supply chain. Every additional 50-cent price increase means another $1 billion.
Our unwillingness to tax ourselves to spend it on ourselves is instead a windfall for the oil companies. And our unwillingness to set high fuel economy standards has left us with a fleet of gas guzzlers that further weakens our ability to respond.
As we desperately try to unload our SUVs and minivans and look for alternative ways to get to work, we’re discovering a mass transit system completely inadequate to the task. Unfortunately, strained public budgets are unable to meet the demands for public investment needed to embrace a 21st century smart-growth urbanism and create a real mass transit system that serves the region’s work force.
The downside isn’t just lost opportunity. The sudden shock of high fuel prices is hurting the economy. Working families are squeezed in an ever-tightening vice grip of high costs and stagnant wages. We’re spending more on gasoline and less on everything else, further weakening economic growth and pushing the United States toward recession.
Auto companies stubbornly stuck in the past (with their high SUV and pickup truck profits) failed to prepare for the inevitable and foreseeable storm. They are suffering for these bad management decisions as are thousands of workers in one of the few remaining high-wage manufacturing sectors in the American economy. GM recently announced plant closures in Wisconsin, Ohio, Ontario and even Toluca, Mexico, with the possible loss of 8,000 jobs. The only bright spot is the potential demise of the ultimate symbol of waste and environmental irresponsibility — the Hummer.
Today’s crisis isn’t the doing of an invisible hand. The auto industry spent millions of lobbying dollars over the past 30 years to prevent higher fuel economy standards. The conservative assault on government took every proposal to raise revenues for public investment in mass transit and smart growth as an opportunity to “starve the beast” and downsize government. In the background, a legion of industry-funded think tanks supported ideologues advancing the myth that the “free market” alone can solve all problems. Worst of all, they successfully established the false choice between environmental regulation and economic growth.
Our failure to responsibly regulate auto emissions and land-use patterns — and to raise public funds — has brought us to the brink of an environmental and economic fiasco. Had we established stronger, steadily increasing fuel standards, we could have helped the auto industry meet our environmental challenges on a level playing field. And higher gas taxes would have given us the public capital to develop mass transit systems that would provide a real alternative to single-occupancy car transportation and stimulate strong, sustainable economic growth.
It’s not too late to learn and redouble our commitment to the future and the public good. It will likely require some sacrifice, some strong rules and, in a period of widening inequality, finding revenue sources that don’t drive already squeezed low-income workers into poverty.
As a nation, a state, a region and even as individual families, we’re continually challenged with the same choices: invest now and benefit later or don’t invest and suffer the consequences. Let’s hope we start making the right choices and ask taxpayers to invest in an infrastructure and technological renewal that could save the planet and increase the quality of our lives and the health of our economy.
Credit: Cohen is president and executive director of the Center on Policy Initiatives, a nonprofit San Diego research and policy center dedicated to issues affecting workers and their families.