James Oaksun’s editorial in the Sun-Sentinel, Broward should increase gas tax, not sales tax, for transportation help, merits a response from the Libertarian Party of Broward County (LPBC) for its on-the-money policy, though it misses the mark on several counts. The LPBC concurs, if indeed it is road maintenance and improvement that needs funding, then it’s the primary users and beneficiaries of roads that should pay the price. A gas-tax better focuses the cost on the users than the alternative county wide sales tax.
Mr. Oaksun wisely understands that by placing the cost on the drivers the funding achieves multiple goals at once. Motorists who use the system bear the cost and do so proportionally, assuming a general correlation between miles driven and fuel consumed. This creates an incentive on the part of drivers to drive less in order to avoid the additional costs, and by driving less they reduce the congestion problem. Drivers at the margin, prioritize their trips, combine trips or carpool to cut costs. It’s a classic win-win.
In contrast, a sales tax increase creates no such incentives. The cost is distributed to heavy users, light users and even non-users. It does nothing to incentivize decreased driving and does nothing to reduce congestion. Those who carpool benefit no more than those who drive alone.
In his suggestion, Mr. Oaksun relies on several excellent principles:
1) The users of a system should bear the cost of the system. To ignore this and have non-users bear the cost promotes miss-use and over-use.
2) Incentives matter. Making users experience the cost for their actions, creates a drive to alter behavior accordingly in order to reduce the cost.
However, Oaksun’s firm grasp of the problem lend false credence to his other confusing suggestions. After arguing convincingly those heavy road users should bear the price of improvements he then suggests that we should “[b]egin an advertising campaign to encourage carpooling and ride sharing.” Who pays for this campaign? Funds collected from the fuel tax? That seems counterproductive. Other non-fuel-tax funds? That would place the cost burden on non-users. But the larger question should be why this campaign is needed at all. If the increased price of fuel does not “campaign” for carpools and ride sharing already, then a series of annoying and expensive public service announcements will do no better. Have such campaigns even been shown to work? And doesn’t the development of the ride sharing economy (with built in carpooling functionality) already show success in meeting these goals?
Likewise, the suggestion of providing free public transportation to the young, seniors and the disabled, works against the incentive structure. Reducing the cost of transportation to zero promotes over use, creates an incentive to consume more of a resource than you can afford by the fact that someone else is paying. This is exactly the opposite of the logic that Oaksun employed so convincingly in suggesting the increased fuel tax.
Credit should also be given to Oaksun for some of his other insights. He is right to disparage the county’s light rail proposal. His mention of a review of any new fuel tax is also wise but just shy of innovative. A sunset clause to the tax such as a fixed ten-year end to it would ensure such policy comes under review. In a world being reshaped by autonomous and electric vehicles as well as ridesharing firms such as Lyft and Uber, consistent revision of policy could ensure that the taxpayer is not robbed blind to fund runaway public transportation spending.
Employing a fuel-tax instead of a sales tax is spot on policy and backed by sound principles. It is those same principles that argue against Oaksun’s other suggestions.
By Frank Montes – Member of the County Executive Committee, Libertarian Party of Broward County.