Flutterby™! : Whoah! M still needed to add 13 2013-11-12 19:56:14.517497+00

Whoah! M still needed to add 13

2013-11-12 19:56:14.517497+00 by Dan Lyke 5 comments

Whoah! $250M still needed to add 13.5 miles of carpool lane? How does $18.5m/lane/mile ever pay back? http://www.petaluma360.com/art...1119897/1362/community?p=2&tc=pg

I think the problem is the growing disparity between the "middle class" and the actual economic flow in the US. $250M sounds like a lot of money to you and I but it's not relative to our economy. To beat a horse:

Q. If Bill Gates were to go to Vegas and blow $1M a day gambling, how long will it take him to go broke (assuming he makes no more money)?

Q. If Bill Gates were to fund the Federal Government entirely, how long will it take him to go broke?

The point is a $1M just ain't what it used to be, except to those of us who don't count their riches in $1M units. The governments (federal, state and local) and corporations operate with vastly different quantities of money.

But... Back of the envelope suggests that that extra lane of a 13 mile stretch of road will cost $18M/year ($600 per month for $100k, and figure that we'll have to replace it after 30 years, or that it'll have equivalent maintenance costs).

Sales tax at 10%, and infrastructure expenditures at 10% of budgets (all gross order of magnitude back of the envelope numbers), says that that extra lane needs to increase sales by $1.8B/year, or 5.625% of Sonoma County's GDP.

If that lane is at capacity (1800 cars an hour) for two hours every working day (260 days a year), then it needs to provide an extra $19.23 in revenue to account for every car which uses the lane. So using that 10% of 10%, each car needs to bring $1900 in additional sales every day it uses the lane. If we look at that as money from property tax, then it's even higher.

California gas taxes are $.395 and $.02 per gallon, Federal gas tax is $.184, so combined that's $.559/gallon. Automobile average right now is 22MPG, so the direct cost to the vehicle is $.027/mile in use taxes, or, for that 13 mile stretch the state and federal agencies recoup just a bit over $.35. Of the $19.35 that the user of that automobile is imposing on the economy.

This is a huge freakin' externality. I suppose I shouldn't complain, given that it'll likely help my property values, but as an income tax payer I'm more than a little concerned that this is creating more infrastructure that we don't have the ability to support.

How much of that money spent to provide the extra lane gets cycled back into the local economy? There is stuff that will be bought locally and labor that will be purchased locally in building this carpool lane. Isn't there? Those laborers have to eat lunch and then there is the beer to buy on the way home so even non-local laborers will be returning part of their paycheck to the local economy.

And since it's a carpool lane then there will be more than one passenger that the car brings into the area and if one of those passengers is a sales person it is likely that he or she will bring in a lot of money to the local economy through the job they hold. The other passengers in the car are probably bringing in more than their paycheck to the local economy but in a less direct way.

I think you are going to need a larger envelope to figure out the economic model for this one carpool lane. ;)

Wait! I've got it! If we just keep deficit spending to build more roads, those laborers will spend money in local coffee shops, which will end up going back to the state as sales and income tax, and we can just keep exponentially building more and more roads as that money expands through our economy!

Yes, I know, my economic analyses are simplistic, but it's also pretty clear that whatever economic models are being used currently, they're fatally flawed. Unless you're a road building contractor.

On the other hand, as Eric points out, this is just a quarter of one of TSA's hair-brained schemes which, even though they're asked to gather statistics to validate, they deliberately screw up the data for.

Okay, what if they make the carpool lane a toll lane? If a car has three or more occupants it doesn't pay but people with fewer can use it at a rate that floats depending on the traffic.