Monday, July 07, 2008

Tolls and Taxes

Toll road in Svinesund, at the Swedish side of...Image via WikipediaOnce again we have the west side cities trying to stop an attempt to toll the Mountain View Corridor.

West-side cities re-emphasizing opposition to toll for new road

However, the question needs to be asked, if the road is not tolled, how will the state pay for it? This brings up another problem that will start facing highway funding and that is decreases in gas tax revenue. However, if people switch to more economical cars and start taking transit more, then gas tax revenues will go down further straining the revenue.

Since the gas tax is assessed by the gallon and not by a percentage of sale like a regular sales tax, revenue goes down if drivers don't drive as much or get more efficient vehicles.

In fact highways actually face the same problem as transit. In Utah much like the rest of the country, transit systems are dependent on sales tax revenue which of course goes down during back economic times. Like the gas tax, it is an unstable form of taxation because you cannot depend on the revenues remaining constant.

Of course tolling is not a 100% solution to the gas tax since it is also dependent on people driving but if someone buys a more efficient vehicle, but drives the same amount on the toll road you do not loose that revenue.

In the long run a more stable form of taxation is going to be needed. Plus, new developments are going to have to a bigger portion of their true cost.

Zemanta Pixie

No comments: