David Michael Miller
The state budget is two months late mostly because Republicans, who control everything, can’t agree on the transportation budget. The projected gap between what’s needed to fix and expand roads and current revenues is about $500 million a year. So, Gov. Scott Walker and some of his legislative colleagues have come up with a “one percent solution.” They would tax 1% of car owners to fix 1% of the problem. Brilliant.
Last week Walker told reporters that he believes Assembly and Senate Republicans were near a deal on transportation and that it might include a special tax on hybrid and electric vehicles. Registration for those vehicles would go up $50 a year to $125, while everybody else would keep paying $75.
That’s right. Your neighbor who drives the gas-guzzling monster pickup would be rewarded while you, trying to burn less fossil fuels and do something good for everybody’s environment, will get penalized for your efforts. Hey, it’s a good deed. It will not go unpunished.
The nonpartisan Legislative Fiscal Bureau has estimated that the new tax would generate all of $5 million a year mostly because hybrids and electrics only make up about 1% of the vehicle fleet. So this tax would solve 1% of the problem. No word from legislative leaders about where the other $495 million will come from.
But wait. Didn’t all these guys sign Grover Norquist’s pledge not to ever raise taxes ever at all on anybody? Apparently, this does not apply to hybrid and electric car owners as we all know that they are almost exclusively liberal Democrats. Folks, when it comes to absolute pledges based on high principle, you just have to read the fine print.
But this is all silly and it just highlights how unserious the governor and Legislature are about solving the problem. The real reason that the transportation budget is in the hole is the increasing efficiency of vehicles powered by the conventional gasoline engine. Vehicles built in 2013 got an average of 24 miles per gallon, which was four miles better than just five years earlier. Because the lion’s share of the transportation budget comes from the gas tax, increased miles-per-gallon means less gas purchased. Add on the fact that the state has not increased the gas tax in more than a decade and you have yourself a deficit in the road-building fund.
Now, you can make a good argument that the state builds too many big highways too wide and too elaborately with little gained in travel time. But there is little dispute that local streets, roads and highways are in bad shape and need to be fixed. So, maybe with some dialing back of the big road projects the deficit is not $500 million, but we still need more revenue just to repair what we have.
The most practical short-term solution is an increase in the gas tax. Gas prices are stable and at historic lows, so an increase is likely to generate minor blowback especially if drivers understand that it will go into smoothing out the pavement. Just since July, six states have increased their gas taxes with the largest increase of 7 cents a gallon in Idaho, a deep red state of high anti-tax sentiment and where lots of driving is a must for a lot of residents. If Idaho pols believed the political winds were favorable for a gas tax there, why not Wisconsin?
The gas tax is also a very efficient and quick way of raising revenue. One potential alternative, tolling, is expensive to start up and relies on Congress to change the rules to allow it to happen on interstate highways, which is where most of the revenue would be generated. I know. It’s emotionally satisfying to imagine tolls hitting every Illinois license plate that crosses the border and that may happen someday, but for now that’s just a tail pipe dream.
But even the gas tax is not the long-term solution. The problem is that while it once was a roughly fair way to pay for roads (drive more, consume more gas, pay more at the pump) it is becoming less so with new technology. There is a theoretical justification for taxing hybrids and electrics more: they still create wear and tear on the roads but they don’t pay their way through the gas tax. But of course that’s true of super efficient conventional vehicles as well, and they make up a much larger share of the fleet.
The long-term solution is a vehicle miles travelled (VMT) tax. Under that scenario, drivers would pay a small amount for each mile they drive, regardless of how their vehicle is powered. The tax could be levied per mile with existing technology that is already in place in every car produced in the last several years.
There is resistance from privacy advocates who fear that Big Brother will be watching our every move. My guess is that as millennials take over that will be much less of a concern; this is a generation that grew up with cell phones that track our whereabouts and an Internet that follows our purchases and our web browsing, and with surveillance cameras everywhere. The expectations of privacy have changed, probably for the worse, but simply keeping track of how many miles a person drives, for the sake of charging them a fair amount for the cost of fixing roads, seems like a more justified intrusion than most other things.
As of now, the hybrid-electric tax is just a bad idea floated by a governor and a Legislature that imagines the people driving those vehicles as voters who would not vote for them anyway. It may not make it into the final budget. But the bigger problem of raising enough revenue to fix our roads remains elusive.
