Friday, February 29, 2008

Funding transportation infrastructure

In commenting on Gov Otter’s proposal to raise the vehicle registration fees by $150, both DFO and Adam essentially accuse Otter of being an out of touch rich guy. Julie makes that point that the Idaho Republican party reflects that philosophy, and will until people stop “reflexively” voting Republican. I agree with both of those statements, but I think they’re misunderstanding what Otter is trying to do.

I’d bet that Otter knows that such a large increase is DOA at the legislature. Nevertheless, proposing it got everyone talking about the need for transportation infrastructure funding, which is what I think Otter really wanted. The $150 was more than a trial balloon, it was a prod. And it worked. So, points to the Gov for political savvy.

How do we fund transportation infrastructure? Here’s my plan. Now, I know that the best taxes are simple to understand and administer, so my plan fails the simplicity test. My plan does, I think, raise the revenue more fairly, or at least it spreads out the pain. I propose several components so that no one group takes the big hit. (This really isn’t a plan because I don’t have the numbers to see if it would work. It’s just a few ideas, but I’ll still call it a plan.)

Index registration fees proportionally based on the price of the vehicle, which can be calculated from the amount of sales tax paid when titling the vehicle. This will place that burden on folks who can afford it. Also, for folks like who have one decent car and one beater, the registration for the beater won’t be so bad. This is similar to the old plan of indexing based on age, but it’s better because new cars vary widely in price.

Perhaps a penny or so increase in gas tax, and some type of tax or surcharge on tires. This will target the folks who use the roads the most. Also, for commercial vehicles, index revenue to weight. The heavier vehicles are harder on roads than lighter ones, and should pay more. Also, when a vehicle is sold, the mileage is required to be reported. Perhaps a small per mile charge(1/2 cent per mile or so) on the selling owner, again to target those who use the roads the most.

Because some of the transportation bucks are going to the state police, it’s fair to target the “consumers” of police services. So, increase fines for moving traffic violations and spend that revenue on roads.

One last way to raise money, though not really related to transportation, is through fines and collections. Fund a few more auditors and tax collectors. Raise fines for failure to follow state law, or at least unleash the regulators so that they can go after people who don't obey the law.

An example: employers are required to have workers' compensation insurance, and face fines if they don't. It is common that employers, small ones mostly, don't get the insurance. It is also common that when a non-covered worker gets injured, either private health insurance or welfare pays the tab, because the small employer just goes out of business or declares bankruptcy. The Industrial Commission collects some fines, but mostly waives them, believing that vigorously enforcing the fines would cause a backlash. Enforcing the fines would help injured workers, would help keep employers who get the insurance competitive because they won't be competing against a lower cost competitor, and will raise revenue. Everybody wins. Except the lawbreaker. This same situation exists throughout state government.

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