Regressive Taxation Is Not The Answer

Background Reading

Summary

Blankenhorn, Skosey, Puentes, and Porcari. Photo: Ryan Griffith Stegink, Metropolitan Planning Council

Blankenhorn, Skosey, Puentes, and Porcari. Photo: Ryan Griffith Stegink, Metropolitan Planning Council

Local leaders agree that Chicago region’s public transit system, and Illinois transportation infrastructure in general, are sorely underfunded. However, it’s clear that the traditional strategy of relying on gas tax revenue to fund projects is no longer working. The state gas tax has been stuck at 19 cents a gallon since 1990, and due to inflation, the buying power of the revenue it generates has fallen over the past few decades.

Given the fact that Governor Rauner plans to cut almost $170 million from state funding for Chicagoland mass transit, and gas prices that are at their lowest point in years, it’s time for lawmakers in Springfield to show some backbone and approve a gas tax increase. Meanwhile, we need to consider creative ways of funding rail, roads, and bridges, such as a vehicle miles traveled tax and real estate value capture.

Transportation experts discussed these topics earlier this week at a panel titled “The Long and Winding Road,” part of the Metropolitan Planning Council’s symposium for Infrastructure Week 2015, “Broke, Broken, and Out of Time.” Panelists included former U.S. Department of Transportation deputy secretary John D. Porcari, the Brooking Institute’s Robert Puentes, and the Metropolitan Planning Council’s Peter Skosey. The Illinois Department of Transportation’s acting secretary Randy Blankenhorn moderated.

“Are we going to continue to fund infrastructure with smoke and mirrors?” Blankenhorn asked. “Are we going to continue to fund transportation on cigarette taxes and gambling? Let’s talk about user fees versus some of these more innovative or different types of revenue streams.”

Porcari argued that the political courage and innovation for raising money for transportation projects is more commonly at the local and state level nowadays, and not the federal level. “There a number of states that have raised the gas tax, indexed it, added new funding sources, used sales tax for transportation revenues, and they’ve all lived to tell the tale,” he said. “Those governors have actually survived.”

Puentes, pointed out that it’s not just Democratic states that are raising their gas taxes, but also Republican states like Wyoming. “So I think there is a myth that the gas tax is unpopular,” he said. “[Former Governor] Ed Rendell said that when they raised the gas tax in Pennsylvania, not one legislator who voted for the increase lost their election in the next cycle.”

Puentes noted that it’s easier to raise gas taxes at the local or state level than at the federal level. “The lower you get, the bigger the connection, a brighter line between the money that’s being raised, the projects that are being invested in, and then the [economic] outcomes at the end of the day,” he said. “People are willing to invest if they know what they’re getting.”

However, Porcari asserted that depending on gas tax to pay for roads, bridges, and rail won’t be sustainable in the long run. “That’s arguably a good thing, in the sense that what’s driving that are things like efficiency in the corporate average fuel economy and electrification of the fleet. Those are important for the nation but are accelerating the decline of [the gas tax] as a stable funding source.”


TakeAways

As the author of this piece of drivel puts it:

It’s clear that the traditional strategy of relying on gas tax revenue to fund projects is no longer working.

Actually it would be more accurate to say that never in the history of mass transit has anything approaching sustainability has been reached. What is worse we have the Regional Transportation Authority which is nothing more than a means of controlling for the benefit of Chicagoland whatever decisions have to be made on the next revenue stream to attach ourselves to. It (RTA) should be abolished and the bloated salaries being paid to the cronies that sit on its board should be poured back into the coffers of mass transit.

The reason that driving is 6X more expensive than riding a bicycle is because both bicycle riding and mass transit riding are overly subsidized. Heck cyclists won’t even accept a tax on their vehicles (i.e. licensing and registration) and yet all they can think to ask is where will the money for the next useless bike lane installation come from.

Mass Transit does not contribute to the overall wealth of the state because it is continually being operated at a deficit. The gasoline tax is very regressive and more than that simply unfair. It is not unlike increasing the income tax charged to each citizen with a portion of that increase going to pay for a yacht being used by the RTA.

Sure some of the gasoline tax supports upkeep of the roadways. But the really ironic thing is that if it were not for the funding secured by its collection for trails and bike lanes, cyclists would probably rather see the highways fall into disrepair enough that it drove automobile use into the ground.

So here we have the specter of a class of rider (bicyclists) unwilling to pay anything for their new infrastructure but more than willing to see motorists having to dig deeper into their pockets.

The groups that are hurt the worst by this tax increase are the working poor and middle class folks with children. The two biggest expenditures in most household (aside from food) are transportation costs and heating.

And here we have a population of hipsters in the City of Chicago who are largely childless and single claiming that they have no interest in being taxed (i.e. licensing and registration) but certain that we need to have working families pay more while they spend their much larger discretionary funds on beer and weed.

This group would likely balk at having to pay for on street or garage parking despite the fact that the City of Chicago is paying for their racks. And do not take my word for this, there is much wisdom in the musings of that wildly Conservative group known as the Muppets.