Here’s an interesting idea posted in the News and Observer, which basically means you pay tax based on the number of vehicle-miles you use. They asked for comments, so here’s mine:
If this idea were implemented in isolation, it could be a good idea. In other words, it must be an "instead of" proposition, not an "addition to" proposition. We should definitely be using more pay-per-use systems. But it has to be a discreet system. Bureaucrats have a knack for adding a good idea to a lot of bad ideas, which renders the good idea inert — and amounts only another means of bleeding people of resources. So why pile an additional tax onto the current taxation system, even if it – in isolation – seems fairer?
Overhauling the revenue side must come with an overhaul of the distribution side. Gross distortions in allocations have dogged NC since the Equity Distribution formula was created. Places that need resources get them, while places losing drivers – (like Eastern NC for example) – get more roads. This system is broken. We need to be more efficient with allocation more than we need new revenue streams. We already spend 10 times what SC spends per capita on roads, and yet they rank much higher than we do on most performance measures. In short, we must think about this holistically. (Allocate by projected vehicle miles, collect by vehicle miles.)
-Max Borders
So – in such a system, how do we capture money from out-of-staters, who certainly do use the roads in North Carolina?
How do we keep this from degenerating into a mechanism of social control? You know that the left in this state would LOVE to penalize drivers who drove over a certain number of miles per year.
Mileage based pricing opens a can of worms that would at least end up with the environmentally-holier-than-thou crowd giving some drivers a hard time. At worst, it is possible that some of the lefties would attempt to legislate a rationing of the number of miles that anyone is allowed to drive.
But, you hit the nail right on the head – the equity formula needs to be taken out back and shot and replaced with a formula that used road money to battle congestion in our urban centers, such as the Triangle.
Well, barring gas taxes, we certainly don’t capture any tax revenues from out-of-staters now. Gas taxes are also the only pay-per-use tax we have when it comes to transportation. So I don’t know I’m suggesting we get rid of that one. I’m thinking of other transportation taxes that could go, I guess. But you’re right, there is a risk that lefties will want to use it as an instrument of control. Highly probable, in fact.
We do capture some gas tax money from yankees going between New York and New York’s southern annex in Florida on 95. We also capture money from drug dealers going from New York to Atlanta on I-85 (Supposing that they gas up when they stop in Durham.) With a mileage based approach, these folks won’t pay anything, unless:
a) There is a mechanism for NC residents to prove that they do not need to pay gas taxes, and it only captures it from out-of-staters. This may not be possible, as it would seem to be putting an unconstitutional tariff on interstate commerce.
or
b) We also keep the gas tax for everyone.
The problem with either approach, if we do not reform the DOT, is that we will just be throwing more money in the front end of the problem, without doing anything meaningful about making the spending of that money more equitable and efficient.
I am waiting for the no-roads and no-growth folks to propose a $5000 “Road Impact Fee” on every moving van coming in from out of state. It is bound to happen at some point!
Again, I think this could be a complement to a gas tax (which insures Yankees pay!). But I definitely see it replacing the fee structure we have now (tag, title transfers, etc.).
But I definitely agree with you 100 percent that they’re messing with the wrong end of the equation — especially since most of our revenues comes from our exhorbitant gas taxes. And most of the waste is in allocation.
This will prove my age, but I remember going to the DMV to buy a tag for an old Buick that I bought not long after I graduated from high school. It cost, with tag, title, and everything, $35.00. And this was back before we squandered the legacy of “The Good Roads State.” Somehow, the state got by without much of a Highway Use Tax.
Max, you are right: A simple, understandable tax would certainly bring some transparency to the transportation tax system, and allow people to understand a little better exactly what they are paying in taxes. This would be better than the nickel-and-diming that currently exists.
All of these small taxes, levied at every turn, make being a North Carolina motorist feel like being pecked to death by a duck.
A mileage based tax system is a recipe for the choo-choo train people to get behind. If you are going to tax people on the number of miles they drive, they will argue you must give people an option not to drive their cars – transit.
It is also the dreams of the urban planners who want to tell us where to live. If it costs more to drive, they will want increased density and more urbanization of our cities.