Sunday, 7 August 2016

Connecticut a public relations nightmare on exploring road user charging

As I wrote last week, the FAST Act is providing Federal funding for states in the USA to pursue road user charging pilots.  Connecticut is one of four states in the I-95 Coalition (which comprises the states through which Interstate 95 passes) bidding for such funds, but is the state which has stirred up plenty of opposition to the idea of even studying road user charging.  So much so that I'd say that even if the pilot proceeds, the "cause" of better road charging in Connecticut has been set back years.

Both Republican and Democrat Senate Leaders oppose it, with opposition both to the state spending money studying a mileage tax (because the state cannot afford to “waste money” on investigating a way to raise revenue, presumably because charging an input barely related to the consumption of a service is undoubtedly superior). 

A Google search of media in Connecticut about the proposed pilot reveals the following:









I don’t believe there is a mileage tax in Connecticut’s near future, if for no other reason than that it’s a complicated and controversial undertaking, and, fortunately, no one seems to be even close to figuring out how to implement it.


Controversial it may be, but complicated and "no one seems to be even close to figuring out how to implement it"?

This is demonstrably untrue

The list of countries/states charging at least some vehicles by distance on at least main highways is as follows:

- Austria;
- Belgium;
- Czechia; 
- Germany;
- Hungary;
- Iceland;
- New Zealand;
- Poland;
- Russia;
- Slovakia;
- Switzerland.

With Bulgaria to come

Even in the USA, four states have weight/distance charges/taxes for trucks and of course Oregon has a voluntary distance charge for cars (which enables a refund in fuel tax for participants):

- Oregon;
- New Mexico (trucks);
- New York (trucks);
- Kentucky (trucks).

Meanwhile, California is embarking on a pilot.  The ignorance is astonishing, but it is an echo chamber.

I understand concern from some about not being aware of the pilot, but the knee-jerk reaction to it smells of remarkable ignorance.  It's cheap political point scoring by people who are uninterested in detail and substance, fearful that supporting a new form of charging will look like a tax rise.

The Governor has indicated that he supports investigating options for the future, because of the decline in revenues from gas tax.   Quite what's wrong with a study and a pilot is difficult to understand, because it looks like gathering information is a negative?

To achieve a balanced debate about road charging, it is critical that agencies communicate the advantages and disadvantages of various road-charging options with politicians and the public, including addressing the following messages:

1.  Charging by mile would replace fuel tax, not be an additional tax;

2. Charging by mile need not be administratively expensive and complicated, when costs of collection as low as 6% of revenues have been seen in established systems;

3. Charging by mile does not necessarily means the state tracking everyone’s movements, as charging can be done by competing private companies which can offer distance charging options that need not include location.

4.  Charging by mile is not unfair on people travelling longer distances, as they pay more now by using more gas, unless they have an electric or hybrid vehicle and so pay much less even though they benefit from money spent on roads.  

5.  The basis for charging should be have some link with a fair allocation of the costs of maintaining and upgrading roads, that means allocating fixed costs across all road users equitably, and allocating marginal costs according to the costs imposed by different road users.  That means moving beyond politics into economics.

Sadly the road charging debate in Connecticut has nothing to do with economics, with only the Governor showing any sign of courage and interest in even investigating reform.  The big lesson is that decisions on studying and pursuing a demonstration need to be made transparently and those in charge need to have a clear communications strategy to beat down the opposition.  

The messages should have been clear about:

- Declining yields from fuel tax will make it unsustainable and increasingly unfair;
- Charging by mile could replace fuel tax;
- Charging by mile is feasible, is done elsewhere, but the state needs to understand a lot more about it and how people would react to it, before considering it further;
- Any money from such charges would be dedicated to road maintenance and upgrades.

That hasn't happened, it is almost a case study in what not to do when a jurisdiction is considering even investigating how to reform the charging and funding of roads.


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