The transportation revenue conundrum

Yesterday’s action by a legislative study commission to give a tentative endorsement to a menu of possible new revenue options for the state transportation system has given rise to a fair amount of discussion – particularly around the issue of a “Vehicle Miles Traveled” tax (or VMT). Some people are understandably concerned about the Big Brotherish aspects of having government read and keep track of your odometer every year – though since its agents already probe and prod your car once every 12 months anyway, I’m not so sure what the real fear is.

As I noted in a comment over on Blue NC earlier today, however, the VMT tax is really just a part of a broader (and unavoidable) discussion about how we pay for transportation in a rapidly changing, more fuel efficient world. As I said there:

“The reason that the VMT tax is getting serious consideration is a simple matter of economics. Right now, gas tax revenues are in the toilet. In many ways, this is good. We want to encourage fuel efficiency, etc…. The problem is that, over time, the state will simply not have enough money to keep up the roads we have — much less upgrade and modernize the system. And there is clearly a need for more transportation money in a fast-growing state — both for highways and mass transit.

Now add to this mix the fact that various tax options can be incredibly regressive and unfair to folks of lower and moderate income and you can see what a jigsaw puzzle the whole thing is.

All of which is good reason to be on the lookout for a soon-to-be-released report from Dr. Steve Jackson at our sibling organization, the N.C. Budget and Tax Center. Steve’s report will examine the whole transportation finance picture and present a menu of progressive (or, at least, less regressive) revenue options for the state to consider as it goes forward.”