Why Subsidize Sprawl, Pollution and Consumption?

(Published: Santa Barbara News-Press - Sunday May 28, 1995)

Suppose your employer offers to pay you a bonus to drive a car to work, but offers no bonus if you bicycle, walk or ride the bus. Would you figure that your employer is trying to encourage you to drive to work? Do you think it would influence your choice of transportation? Is this hypothetical? Not at all. Every day employers around the country effectively "pay" their employees to use cars to get to work. They do this by providing a free parking space worth at least $1,000 a year nationally, and even more in Santa Barbara.

That "free" parking space is just one of a list of hidden subsidies that encourage us to drive. Federal, state and local governments as well as businesses provide other hidden subsidies that make driving appear far cheaper in time and money than it really is. This makes it almost impossible for alternative forms of transportation -- from public transit to walking -- to compete fairly with the automobile. Hence our transportation choices are limited and our lifestyle and environment are affected in many ways.

Free parking at work accounts for about $85 billion nationally in hidden subsidies. Yet this is just one part of a system of automobile subsidies in our country that total more than $300 billion per year according to a World Resources Institute report on the true costs of driving.

To put that in perspective, $300 billion is a subsidy of about $5,000 per year for a family of four. That is $5,000 that each family must spend on subsidizing automobile use, whether its members use an automobile or not.

What if families were given a choice? Would they choose to spend $5,000 a year on auto subsidies? Or would they rather spend it on something else?

There are many employees where I work who commute over 80 miles per day round trip. The result is congestion on the roads and freeway, pollution and wasted energy and other resources. And worst of all, employees suffer a reduced quality of life: They spend time commuting which could be spent in far more enjoyable and productive ways.

They endure this long drive because the cost of their commute is subsidized in a variety of ways, but the price of a home near work is not. Given a choice, though, many families would probably prefer to "cash in" the auto subsidy and spend it on a home closer to work.

In the current Congress there have been major moves to slash subsidies for Amtrak and other public transportation. Yet these subsidies are only about 1% of the subsidies that exist for automobiles. But the automobile subsidies are more subtle than a line item in the Federal budget for Amtrak.

Hidden automobile subsidies include the social costs of the over 1.5 million automobile accidents each year and the cost of air pollution on agriculture and on public health. They include the lost tax base of land used for automobiles. In urban areas in the United States almost half of the land is used for automobiles and much of this is tax-free. Subsidies even include the estimated $20 billion share of military spending devoted each year to securing the flow of oil for automobile use.

These hidden costs are in addition to the more direct subsidies of highway patrols and highway construction. In Santa Barbara over half of the local road maintenance budget comes from sales taxes, not from gasoline taxes.

By subsidizing roads for passenger cars, we also subsidize the use of trucks to haul freight long distances. Rail is far more energy and resource efficient, but it cannot compete fairly with subsidized truck freight. Trucks pay for a tiny fraction of the road damage they cause, while rail must pay all of its own costs.

If we were to charge the $300 billion at the gas pump, where Americans consume over 70 billion gallons of fuel per year, the additional cost would be over four dollars per gallon. That would bring the total cost per gallon to between five and six dollars. That is not a punitive cost, just the cost for motorists to pay their way without any subsidies.

What would the country be like with gasoline priced for automobiles to pay their way? Well, most European countries have gasoline priced between four and five dollars per gallon, so we can get an idea of the effects.

The most noticeable effect is that people live closer to work and to shopping than most Americans do. Hence, even if they have to walk, bicycle or use public transportation -- which seems slower than driving -- they spend much less time in transit than we do.

Our sprawling land use necessitates the use of automobiles. But business and government subsidies of automobile use are actually a *cause* of sprawling land use. These subsidies fund flight to the suburbs, leaving our cities to die. The resulting urban decay and crime causes yet more suburban flight. It is a vicious circle that is largely unique to the United States because the United States is unique among industrialized nations in subsidizing automobile use so heavily.

A report "Beyond Sprawl: New Patterns of Growth to Fit the New California" was recently released with much publicity by the Bank of America, among other sponsors. The report cites automobile subsidies as a central cause of California's sprawling growth.

Without the subsidies, development occurs along public transportation routes. Instead of sprawling suburbs, development occurs in the form of central cities and satellite cities with open space in between. Transportation within cities is easily done on foot, bicycle or public transportation. And transportation between cities is easily done by rail, something which is impossible with sprawling development.

Open space close to urban areas is something Europeans take for granted, yet our sprawling land use makes this rare in much of the United States. We are fortunate in Santa Barbara that we have preserved our local farms and natural wilderness, but this is not typical with subsidized sprawl. And we are rapidly losing what we have preserved.

The issue is not whether automobiles should be a part of our transportation system. The issue is whether we should be subsidizing their use.

So let us begin a public debate on the issue of automobile subsidies. This does not necessarily mean a rush to raise gasoline prices to $6 per gallon or any other specific policy. The first step to any policy change is an awareness of the full effects of the current policy.

Considering that the effects of the current policy include wasted resources, periodic wars over oil, pollution, loss of open space, poorer health, reduced quality of life and even crime, we do have good reason to debate the policy.

Then we can make informed policies on transportation that can improve our lives and make our world a better place.

See Also Sierra Club Auto Subsidies Page