Local taxes on guns, bullets, hotels, gasoline and...

So in the previous entry on automated traffic enforcement-related fines, Charlie makes the comment that it would be fairer to raise taxes than to use automated traffic enforcement-related fines to generate a significant amount of revenue for local jurisdictions--and note that 10% of the Town of Chevy Chase's budget comes from enforcement camera-related fines generated on Connecticut Avenue.

Well, I think he's right from a revenue standpoint, but I favor enforcement cameras because violations--IN THE CITY--can have catastrophic negative impact on pedestrians and bicyclists, and DC has far more pedestrians and bicyclists than other cities in the metropolitan area.

But there is no question that hotel taxes, parking taxes, parking meter revenues, and traffic enforcement tickets are seen as primarily raising revenue from non-residents, and because this is so--except for the hotel association and the pesky representatives from the American Automobile Association Mid-Atlantic Chapter (see ""War on cars" lives as AAA knocks L St. bike lane" from Greater Greater Washington)--it's seen as a pretty safe way to raise revenues.

But the problem with this is that generally--except for hotel taxes--you need the taxes to be assessed on a wide area, in order to be effective and have the kinds of public policy results that are desired.

Otherwise people will shift their purchases, to the extent that they are able, to neighboring jurisdictions that don't assess similar taxes (this is a big issue with Native American reservations and gasoline and cigarette excise taxes, among others).

How about assessing certain taxes at the scale of a metropolitan area (or larger)?

We had a conference with our bike sharing business partners today, and we learned (to be announced soon enough) that with one European country, they are negotiating a framework agreement for bike sharing with the national government, and in turn any local or metropolitan government or transport agency in the country will be able to get the same terms, regardless of the size of the system.  I thought that was quite interesting and of course, couldn't work at the same way in the U.S., but is relevant to this tax issue.

It ain't gonna happen anytime soon, but we really need certain planning and tax policies to be enacted and levied at the metropolitan scale.

And if that isn't hard enough, it's likely impossible in terms of levying the same tax over multiple states, in this area's case, between DC, Maryland, and Virginia, when in Northern Virginia (and the Hampton Roads area--instead they are getting a big tunnel project to be funded by tolls), they can't even get approval from the state legislature for a local transportation tax.

Of course other metropolitan areas cross state boundaries and would have similar issues, such as in Greater Philadelphia, Kansas City Missouri and Kansas, Portland Oregon and Vancouver Washington, Greater Chicago, and Greater New York City.

Just like I argue that the Metropolitan Planning Organization should actually be the region's transportation planner (they probably say they are, but in terms of substance vs. form, they aren't, at least in the way I think they should operate, see "Metropolitan mass transit planning: more thoughts" and "A clear signal of a failure in "metropolitan" transportation planning: a proposal to eliminate a subway station from Dulles Airport") and make transportation policy, the same goes for other actions.

(And yes, a similar attempt failed for the most part in Georgia, for reasons I have already discussed.  See "Failure of the transit-roads sales tax measure in Metro Atlanta.")

Now in metropolitan Minneapolis, the Metropolitan Council does transportation planning, runs the transit agency, runs a regional park network, and does water resources planning and management too.

And in Portland, the MPO is part of the (Portland) Metro Government, and people are elected to the Metro Government from the various jurisdictions, and they do a bunch of policy and operational programs at the metropolitan scale.

And many metropolitan areas have various agencies that might operate and tax on a metropolitan scale, such as for transit, parks districts, museum districts, or the Allegheny Regional Asset District in the Pittsburgh area.

But for the most part, true metropolitan governments--the exception being those places where the city and county have merged, such as Louisville or Lexington in Kentucky and Indianapolis in Indiana or Jacksonville in Florida, Nashville in Tennessee, and Kansas City, Kansas (not KC, Missouri)--don't exist very much in the United States.  (There are more examples than these, see the Wikipedia page on Consolidated city–count[ies].  And this story from Governing Magazine, "Cities, Counties and the Urge to Merge.")

Gasoline taxes

DC and Maryland charge a gasoline excise tax of 23.5 cents/gallon, and Virginia's is 17.5 cents/ gallon.  So people in the metropolitan area can tax shop to save money.  This makes Montgomery County's exploration of assessing a separate local gasoline tax ("Berliner seeks Montgomery County tax for transportation" from the Gazette) somewhat problematic.

It's not a bad idea.  It will raise some revenue.  But it will be easy for people to buy gas in neighboring jurisdictions for less, defeating the purpose.

But if there were the same level of "local" gas tax assessed across the metropolitan area, the problem for the most part is solved.  More money for transportation, harder to evade.

Hotel taxes

Well, every jurisdiction does its own thing.  DC's problem is the cost of land makes offering cheaper rooms at the core quite difficult.  That's why many people visit DC but stay in Maryland or Virginia.  Since the visitors are already paying premium rates, you might as well tag them for the tax too.  But there is no question that National Harbor in Prince George's County in particular uses higher hotel tax rates in DC as a competitive brickbat.  We have to live with it I suppose.

The Wall Street Journal has a general article on the topic, "Best and Worst Cities for Travel Taxes,"based on a study ("GBTA Reveals Best and Worst Travel Taxes in Top 50 U.S. Destinations," press release) from the Global Business Travel Association.

According to the study, DC ranks #10 on the highest discriminatory travel tax rates.  But we can take comfort in the fact that there are 9 other jurisdictions that are worse.


Restaurant taxes

In DC and probably other tourist cities, sales taxes in restaurants can be pretty high, for the same reason that hotel taxes are high.  We can't tax commuters, so we make up for it in restaurant taxes.

Parking taxes

 Lots of people park at places in the suburbs that don't charge.  While in the suburbs parking taxes could be assessed on parking lots and they should, regardless of whether or not they charge, in some respects charging for parking puts DC at a competitive disadvantage compared to the suburbs. 

So we have to make up for that by making DC totally awesome and worth coming to whether or not you have to pay to park.

Of course, we want parking to be charged for to encourage people to get here by transit (except for the fact that now a transit trip is so damn expensive).  These fees, and part of a proposed transportation withholding tax could be directed towards the transit system to help to reduce fare escalation.

In Baltimore, the Charm City Circulator bus is free, paid for by a tax on parking structures.  See "Baltimore Hotel Tax | Increases in hotel, parking taxes draw complaints" from the Baltimore Sun

Left:  Walmart's urban strategy hasn't fully percolated down to their advertising circulars.  I am amazed at how the circulars in the Washington Post prominently feature guns.  Fortunately the murder rate has been dropping for years.  Still, I think they need to better "zone" their advertising message for urban markets.


Guns and bullets

A few weeks ago, there was a column in the New York Times, "If Guns Do Not Kill, Tax the Bullets," suggesting that a way to reduce gun violence would be to make guns and bullets expensive, through taxation.

I thought that was pretty interesting, since we're not likely to get Congress to back off of being the NRA's lapdog, that might be the best way to go.

Ideally, such a tax would have to function at a multi-state scale or nationally (which isn't likely to happen anytime soon).  Chicago is proposing such a tax ("Chicago Area Proposes First Local Tax on Guns, Bullets" from the WSJ) and while some of the caveats of such a law is that lawbreakers tend to purchase guns and bullets illegally anyway, it might not have much impact.  But without such a tax operating on a scale broader than the city (in DC there are fewer than two places where you can buy guns I think), people will merely avoid the tax by purchasing items somewhere else.

Car taxes/higher registration fees

This is another area that bears consideration.  I used to think such a tax was onerous--I never heard of such a tax, as I was from Michigan and they would never treat cars as taxable property for residents, but when I first moved here I learned that they were common in Virginia at the state level and locally--but the reality is that such taxes help to pay for transportation infrastructure, just as property tax on buildings pays for the operation of local government.  (Image of the Arlington County car tax decal from the 12 Circle blog.) 

Such taxes and fees if they exist are generally pretty low.  In DC though, people may try to avoid local registration, because there is a high transfer fee when you first register.

-- Arlington County Vehicle Personal Property Tax webpage.  The tax rate is $5/$100 of assessed value, prorated by the number of months the car is registered in the county.

In Washington State, jurisdictions can add a fee for transportation improvements of $20 without having to get voter approval.  A higher rate can be assessed if voters approve.  So far, after having been put to the voters in many jurisdiction, no jurisdiction has successfully done won a higher fee.  An attempt in Seattle failed last year.  See the past blog entry "Seattle car registration supplemental charge not likely to be approved today by voters." 

--Washington State Licensing: Local transportation benefit district fees

Since the cost on the road system for maintenance is a minimum of 6 cents/mile or $600 for 10,000 miles, $20 + gasoline excise taxes don't go very far, especially when considering the cost of adding new infrastructure.  If you bought all your gasoline in DC or Maryland, you'd pay 41.9 cents/gallon in federal and state gas taxes.  If you get 22 mpg, you'd pay a total of $190 in excise taxes. 

Probably the property tax on vehicles is a better bet.

Note that the current 25th anniversary issue of Governing Magazine has a story, "What Will Government Look Like in 2037?,"  where they ask various people what they think will be the most pressing and biggest changes in state and local issues over the next 25 years.  Joshua Schank, President of the Eno Center for Transportation, believes that we won't have VMT-based excise taxes nor a high gas tax, that instead, monies for transportation will mostly come from general funds.