Tuesday, 14 May 2013

Florida advisory panel proposes distance based road pricing

Columnist Kingsley Guy in the South Florida Sun Sentinel has commented on the proposal from the Florida Metropolitan Planning Organization Advisory Council (take a breath) that the state introduce a 2/c mile tax on road use.

The proposal comes simply from concerns that fuel taxation is becoming increasingly less reliable as a source of revenue to fund the state's transportation expenditure.

The state has 12 different fuel/vehicle ownership taxes (plus two Federal fuel taxes), two of these taxes haven't been increased since 1941 and 1943 respectively (meaning they are now worth 7-8% of what they originally were set at).  3 are inflation adjusted.

Sources of Florida state transportation trust fund revenues

Black line shows where revenues have to be to remain constant in real terms
FMPOAC concludes that six options should be looked at.  These are:
- Index all fuel taxes to inflation;
- 1c optional Municipal sales tax;
- Increase State Highways fuel tax by 2c a year, above inflation;
- Vehicle Mileage Tax;
- 5c local Diesel tax for counties;
- Redirect part of fees that were shifted from transport funding to the State Transportation Trust Fund.

On VMT it said:

This recommendation is to have the Legislature commission and fund an extensive effort to deal with the systemic issues of fuel taxes becoming less sustainable as a primary surrogate for a transportation user fee. While fuel taxes served as an adequate substitute for a true user fee for decades, significant increases in mandated vehicle fuel efficiency and the introduction of all electric and plug‐in hybrid vehicles are eroding transportation revenues. It is recognized that there are significant concerns over the concept of charging users of the highway system based on each mile traveled. These include privacy of citizens, the cost of implementing such a system, and institutional issues associated with revenue sharing. This effort is intended to address these issues at a minimum, deploy a demonstration of the concept and develop a business plan and implementation roadmap to move Florida to a VMT‐based system.

Guy rightly rejects Virginia's bizarre hypothecation of a new sales tax to pay for transport, as if people who rarely drive should pay more for potholes (through their shopping) than a trucking firm does.  May as well pay for electricity through general taxation, or telecommunications.   

He notes that tolling in Florida has had a distance dimension to it, and that is widely accepted.

However, he also notes some important concerns:

- Privacy.  Suggesting an odometer only option.  Which is fair enough, as long as it cannot be defrauded.  However, privacy does need to be respected, not dismissed.  Too many wingnuts think distance based road pricing is part of a conspiracy  (one that would be far better implemented if done in cahoots with mobile phone operators!);
- Fraud.  He expresses concern about people cheating a distance based system, which is fair enough, but this can be addressed and has been elsewhere.  Enforcement is a key part to any such system;
- Visitors.  A big issue for any state only system is covering those from out of state quickly and efficiently.  I'd suggest some sort of vignette (time based charge), but there are other options too.
- Heavy vehicles.  He notes that fuel tax charges heavier vehicles more, and that there needs to be a reflection of weight as well.  He's right, and fuel tax does this very poorly, as it tends to charge the smaller trucks too much, and the heaviest ones not enough.  Notice that the trucking sector can often be very unhappy about better pricing of roads, partly for this reason.
- Transition.  He wonders if there may still be a fuel tax as well as distance charging.

He also notes that there remains an issue of poorly spent money, which is separate from that.

I'm encouraged that Florida is starting to look at this issue more seriously.  The state has done well to use tolls to a wide extent, which has helped it a great deal and will help it with any transition to more direct user charging.  However, it could do worse than look at progress in Oregon, and the lessons learned from distance charging in other countries as well.

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