New Report on Gas Price Vulnerability: Who's Smarting, and Who's Smart

A Georgia family, cash-strapped by the recession, plans to take their daughter out of private school. They need the tuition money for gas, much of which they burn while stuck in Atlanta traffic. A student from Iowa puts her gas bills on her credit card, hoping to be able to pay off the debt when she graduates. A man in New Mexico shuttles between his job in Santa Fe and his fiancé in Albuquerque. His employer won’t allow flex time or telecommuting, which would give him the option to take the bus or work from home. So he spends about $11,000 a year – more than a quarter of his take-home pay -- on gas, insurance and car payments.

These are extreme cases, but they illustrate a widespread problem. Georgia, Iowa and New Mexico are among the ten states whose drivers are most vulnerable to high gas prices, according to a report we released today. NRDC’s 5th annual state oil addiction rankings look at how much money drivers in each state spend on gas as a percentage of their income, and what solutions states are using to fight oil addiction. (See the full rankings here.)

For the fifth year in a row, Mississippi drivers spent the greatest portion of their incomes on gas, shelling out an average of 7 percent, or $2,255, on gas in 2010. Compare that to Connecticut, which has retained its least vulnerable ranking for five years now – its drivers spent just 3 percent of their income ($1586) on gas.

What separates these states? Smart policies that encourage fuel efficiency and reduce the number of miles people need to drive. Many Americans, however, are locked in to paying high prices for gas.  They have limited or no access to public transit. They drive old, gas-guzzling cars they can’t afford to replace. They are forced into lengthy commutes by growth management policies that encourage building homes far from jobs. Their employers do not allow telecommuting or public transit benefits, but instead offer free parking.

The people mentioned above told their stories to Lisa Margonelli of the New America Foundation, which has a blog called The Energy Trap – it examines how high gas prices are forcing people to make difficult economic decisions. Many of these people live in states that have not made a serious effort to reduce their oil addiction.

That student from Iowa (the state ranked 9th on our vulnerability list, and 47th on the solutions list), for example, commutes 120 miles a day from her parent’s house to college. With gas prices nearing $4 per gallon, she no longer makes enough money at her part-time job to pay for gas. There are no buses she can take, and she’s too far along in her degree to transfer closer to home. She’s trapped into charging gas on her credit card, which in turn charges her 19% interest. She’s racked up about $1000 in gas bills already this semester. “I think about gas every day,” she says. 

An Atlanta-area woman (Georgia ranks 4th on vulnerability and 21st on solutions) told Margonelli that her 34-mile commute sometimes takes 2 hours – meaning much of her gas money is burned up sitting in traffic. She could take a train part of the way, but her employer doesn’t offer vouchers. Her family has changed the way they buy groceries, has dropped all luxury spending, and next year they plan to take their daughter out of private school. “I’m spending so much on gas right now,” she says. “I’m not putting that money into the economy the way I used to, going out to dinner or paying for my daughter’s school. That’s sad.”

What can states do to get their residents out of the energy trap and put gas money back into their pockets? I’ve mentioned a host of solutions in earlier posts. In this report we highlight specific state policies, such as California’s groundbreaking clean car law and low-carbon fuel standard, which is laying the groundwork for a cleaner, more efficient car fleet. Sixteen states have effective growth management policies that will help residents cut down on driving time. Texas and Minnesota are looking at Pay-As-You-Drive insurance, which could save most American households hundreds of dollars a year. Eight states have policies that encourage telecommuting; three have set specific targets to reduce their vehicles miles traveled. And of course, investing wisely in public transit (as opposed to highway boondoggles), can give people true mobility choice.