Monday, 9 February 2015

Minnesota seeks to ban public funding of studies into road pricing

A Bill has been presented to the state House of Representatives (HF389) that would effectively stop taxpayer funding of state institutions investigating distance based road pricing.  It specifically states that:

The University of Minnesota and the Board of Trustees of the Minnesota State Colleges and Universities shall not utilize state funds or resources, including but not limited to appropriations and funds provided under subdivision 1, to:
 study, test, demonstrate, evaluate, or promote a potential mileage-based user fee, or to contract for the performance of these prohibited activities; or
provide funds including membership dues to any organization regularly engaging in research or advocacy concerning mileage-based user fees, including but not limited to the Mileage-Based User Fee Alliance.

Minnesota Public Radio notes that the Bill was proposed by Republican Rep. Bob Barrett of Lindstrom.   Barrett also opposes a proposed increase in fuel tax.  His solution is that the Motor Vehicle Sales Tax be amended so that more than 60% of the revenue raised can be spent on roads.  I'd question why a sales tax on vehicles should be used for any transport funding at all, since the purchase of a vehicle bears no relationship to its usage (and you can buy vehicles out of state).   Better to scrap such a tax (making it easier to buy newer, safer and more fuel efficient/less polluting vehicles) and charge for usage of the roads.

Whilst I understand Barrett's opposition to higher taxes, the opposition to studying changes to taxation seems strange.   Is it just because he opposes the policy of charging for road use that he doesn't want taxpayer money spent on studying it?  If he opposes the use of taxpayer money for any studies into transport policy, then that would be a wider matter.  Legislating to micro-manage such spending seems counter-intuitive for someone who advocates a smaller role for government.

Long standing advocate for distance based pricing, Lee Munich, writes in the Minnesota Star Tribune against the Bill.  

The case for studying distance based pricing is clear as he says:

This approach is being seriously studied by many states across the nation for a very good reason: As the nation’s vehicle fleet becomes more fuel-efficient, and more apt to be using non-gasoline energy sources, the revenue raised by the gas tax decreases. When less gas tax revenue is raised, we don’t have enough money to keep roads and bridges safe and efficient. When that happens, people and economies suffer. And the system becomes more inequitable, as some drivers don’t pay their fair share of road costs based on their use of the road system.

For this reason, California, Oregon and Washington are all developing large-scale pilots to test mileage-based fees on the roads. Many other states are launching studies to explore these fees as a long-term alternative to replace the gas tax.

The Bill has been referred to the State Committee on Higher Education Policy and Finance.  I don't know what chances there are of this making law, but I would hope it doesn't.  A lot of work has been done in Minnesota looking at various dimensions of distance based road pricing, and there are plenty of issues worth working through, but throwing the idea away and sticking to a sales tax to pay for roads is simply economic nonsense.

Imagine paying a sales tax on buying a new mobile phone to pay for your network, or paying a sales tax on appliances to pay for electricity.  It would make much more sense to scrap the sales tax, replace it with an increase in fuel tax (for the last time) and transition towards users pays.

Footnote:  Yes I am back, and writing more regularly now

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