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Financing Highways

March 20, 1988

Sacramento's apparent agreement on a $1-billion transportation bond issue (Part I, Feb. 20) may make sense when viewed from the narrow perspective of highway construction. However, taking a broader view, pay-as-you-go financing, which avoids the high-interest costs of bonds, may be a better choice and may be acceptable to the motoring public even if it means a substantial increase in user fees.

For example, doubling the state tax on motor vehicle fuels, from the present 9 cents to 18 cents per gallon, would generate roughly $1 billion per year in revenue while adding $90 to the cost of driving 20,000 miles in a car getting 20 m.p.g. Many drivers would consider this money well spent if it buys improvements which reduce congestion, travel time and driving stress.

Furthermore, if traffic safety is a principal factor in these improvements, as it ought to be, the accident rate should fall. Not only would this save lives and reduce injuries but automobile insurance costs should come down, providing savings which would offset a considerable part of the increased user fees.

These benefits also can be achieved if transportation funds are used to reduce the number of vehicles on the road by making car pools, van pools and public transportation more effective and attractive as alternatives to the driver-only car. Improved traffic flow also would reduce air pollution.

The bond proposal should be evaluated not merely as a means of financing highway construction for economic development, but as part of a coherent package which considers such related issues as public safety, auto liability insurance, public transportation and air quality. From such a viewpoint, pay-as-you-go financing makes better sense and should be politically acceptable if the governor and Legislature can provide the necessary leadership in presenting the issues to the public.

HOWARD L. GLASS

Orange

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