Recently the Indiana Department of Transportation (INDOT) released its draft Environmental Impact Statement on the proposed I-69 Interstate highway through southwestern Indiana. That statement identified the I70/US41 route as the route that would result in the least amount of environmental damage as well as the route that would be cheapest to build. Nonetheless, INDOT rejected that route because it didn't meet its criteria.

What is that criteria, then, if not to deliver transportation at the lowest cost to society? Perhaps, as the article below suggests, transportation building has become an end in itself and the higher the cost, the better. Transportation building has become as American as centralized bureaucracies, five-year plans, and state-controlled industry.

The following is excerpted from SUBURBAN NATION: The Rise of Sprawl and the Decline of the American Dream (Farrar, Straus, and Giroux, 2000)

THE AUTOMOBILE SUBSIDY

To what extent is automobile use a "free" good? According to Hart and Spivak, government subsidies for highways and parking alone amount to between 8 and 10 percent of our gross national product, the equivalent of a fuel tax of approximately $3.50 per gallon. If this tax were to account for "soft" costs such as pollution cleanup and emergency medical treatment, it would he as high as $9.00 per galion. The cost of these subsidies-approximately $5,000 per car per year-is passed directly on to the American citizen in the form of increased prices for products or, more often, as income, property, and sales taxes. This means that the hidden costs of driving are paid by everyone: not just drivers, but also those too old or too poor to drive a car. And these people suffer doubly, as the very transit systems they count on for mobility have gone out of business, unable to compete with the heavily subsidized highways.¹

Even more irksome is the fact that spending on transit creates twice as many new jobs as spending on highways. Every billion dollars reallocated from road-building to transit creates seven thousand jobs.2 Congress's recent $41 billion highway bill, had it been allocated to transit, would have employed an additional quarter-million people nationwide.

Because they do not pay the full price of driving, most car owners choose to drive as much as possible. They are making the correct economic decision, but not in a free-market economy. As Hart and Spivak note, an appropriate analogy is Stalin's Gosplan, a Soviet agency that set arbitrary "correct" prices for many consumer goods, irrespective of their cost of production, with unsurprising results. In the American version of Gosplan, gasoline costs one quarter of what it did in 1929 (in real dollars).³ One need look no further for a reason why American cities continue to sprawl into the countryside. In Europe, where gasoline costs about four times the American price, long-distance automotive commuting is the exclusive privilege of the wealthy, and there is relatively little suburban sprawl.

The American Gosplan pertains to shipping as well. In the current structure of subsidization, trucking is heavily favored over rail transport, even though trucks consume fifteen times the fuel for the equivalent job. The government pays a $300 billion subsidy to truckers unthinkingly, while carefully scrutinizing every dollar allocated to transit. Similarly, we try to solve our commuter traffic problems by building highways instead of railways, even though it takes fifteen lanes of highway to move as many people as one lane of track.⁴ This predisposition toward automobile use is plainly evident in the prevalent terminology: money spent on roads is called "highway investment," while money spent on rails is called "transit subsidy."

The American Gosplan is not a conspiracy so much as a culture-albeit one strongly supported by pervasive advertising-and it is probably unrealistic to hope that legislators will soon take steps, such as enacting a substantial gasoline tax, to allocate fairly the costs of driving. Pressured by generous automobile industry contributions on the one hand and a car-dependent public on the other, politicians have lately been using gas-tax elimination as an election strategy, with some success. But there is encouraging information suggesting that a gas tax may not be the political suicide that most politicians suspect. According to a recent Pew Foundation poll, 60 percent of those asked favored a twenty-five-cent-per-gallon gas tax to slow global warming.⁵

While there are many supposedly "anti-business" arguments for a higher gas tax-from fighting global warming to supporting public transit-the real justification is economic: subsidized automobile use is the single largest violation of the free-market principle in U.S. fiscal policy. Economic inefficiencies in this country due to automotive subsidization are estimated at $700 billion annually,⁶ which powerfully undermines America's ability to compete in the global economy. Although suburban sprawl is the concern in this book, it is not the only sad result of this fundamental error.

The problems of automobile subsidization have been well documented; this is old news. And yet it is news which few people seem to understand, and which has barely begun to influence government policy in any significant way. So, to all the concerned activists nationwide who are banging their heads against the wall on this issue, we do not have very much to say except "May we join you at the wall?" Fortunately, the automobile subsidy is only one of many forces contributing to sprawl, and there are other avenues along which anti-sprawl efforts are likely to achieve meaningful results.