Why a statewide bike tax makes no sense

Posted on February 21, 2013 by Tom Fucoloro

Source: Seattle Bike Blog

State Democrats unveiled a $10 billion revenue package for transportation Wednesday that includes monstrous investments in new highways and highway expansions and comparatively few investments in safe streets and projects that make it easier and safer to bike and walk in cities and towns across the state.

And yet, one proposed new source of revenue to pay for all this is a $25 tax on the sale of bicycles costing $500 or more. Yes, a bicycle tax.

A bicycle tax makes no sense for many reasons, several of which Cascade points out and a few of which I will get into below. But the most important reason is that bicycling actually saves the government money.

It is estimated that a mile cycled in Copenhagen results in a $.42 economic gainfor the government. A mile driven costs the government $.20.

Closer to home, a study in the Journal of Physical Activity & Health found that Portland’s investments in cycling will save the city $388 to $594 million in health care costs by the year 2040. When you calculate the statistical value of lives saved (grim, I know, but it’s a science journal), the amount of money saved jumps into the billions.

The state should provide incentives for behavior they want to encourage. Bicycling is unequivocally good for the state, both economically and in terms of health and well-being. To tax the purchase of bicycles up to 5 percent on top of existing sales taxes simply makes no sense.

Now, I also understand that discussions about transportation funding and taxes are not always rational or data-based. Rep. Judy Clibborn, who played a key role in crafting the transportation package, told the Stranger that she does not agree with the bike tax even though she is the one who put it in the package. So why did she put it there?

“They always say—and I don’t agree—that [cyclists] are not paying for anything,” she told the Stranger. The Seattle Times says the bike tax, which would only raise about $1 million over ten years, was “included for largely symbolic reasons.”

Yet it could have very real implications for small, struggling local bike shops across the state. While Wal-Mart and K-Mart might have no trouble stocking bikes that cost less than $500 (Biking Bis suggested naming the tax the “Wal-Mart Protection Act”), small bike shop margins on bike sales (especially low and mid-range bikes) are very slim. $25 is a low-end set of lights, u-lock or helmet. It’s hard enough to pay a small staff and keep the doors open without either forking out $25 on every bike sale. Passing the tax onto customers would make it that much harder for them to compete with prices at online bike sellers.

Most local bike shop owners I meet are like book store owners: They do it because they love it, and they’re happy if they can pay staff, pay bills and take a little home at the end of the day. After all, it’s about pairing people with the right book/bike. I’m not sure they are the ones who need to be paying disproportionately for freeway expansions.

If this transportation plan included significant and bold investments in safe cycling facilities across the state, I might be willing to consider a “symbolic” tax like this, especially if it would help make the package a reality. Unfortunately, the vast majority of money in the proposed package is still headed to private automobile projects, many on freeways that bikes are not even allowed to use, let alone have a safe space to ride. Here’s where the money will go, according to the fact sheet:

Package Fact Sheet v4-1

Package Fact Sheet v4-1

As you will see, there is a fairly exciting $60 million complete streets investment pool. This money could go to towns and cities across the state to redesign dangerous streets to reduce car collisions and increase safety and access for people on foot and bike. That’s great, but their own graph shows that this level of investment rounds to zero percent of the total package.

And here’s how the other 100 percent will be paid for:

Package Fact Sheet v4-2

Package Fact Sheet v4-2

People who bike pay into most, and often all, of these pools of money. Most adults who bike also own a car, and the motor vehicle excise tax costs the same whether you drive every day of only keep it around for occasional use. And now there’s an added bike tax, too.

Highways are immensely expensive, both to build and to maintain. But bicycle infrastructure essentially pays for itself in health care savings, not to mention quality of life. This should be celebrated and supported, not discouraged with “symbolic” 5 percent taxes.

And really, this is all irrelevant because the vast majority of bike lanes and safe city streets projects are paid for by municipalities, not the state. And as the draft funding plan shows, there are no plans to change that. So why do State Democrats want to raise taxes on bikes again?