Higher Taxes, No Congestion Relief

HB 148 Congestion Relief Fund

The NC House is currently considering HB 148, a bill that would allow six urban counties to levy a ½ cent sales tax increase and all other counties to levy a ¼ cent sales tax increase in order to support public transportation.  The bill is offered under the guise of congestion relief, but is actually a massive tax increase that will have little to no impact on reducing congestion.

Supporters of HB 148 believe that building a light rail system of trains in the Triangle and Triad areas, much like the LYNX system in Charlotte, will reduce traffic congestion and provide a public benefit.  Unfortunately, neither will occur.  HB 148 will result in massive tax increases paid for by all citizens while benefiting a very narrow portion of the population.

Most troubling is the provision in the bill that prohibits counties from using any funds to maintain existing roads or build new roads.  The North Carolina Section of the American Society of Civil Engineers (ASCE) recently gave North Carolina’s roads a “D” grade and stated that in excess of $60 billion in infrastructure improvements were needed.  This bill does nothing to solve that problem.

HB 148 Increases Taxes

• If all counties implemented the proposed tax increases, it would be similar to a $250-300 million statewide sales tax increase
• Car tax can be increased $3 per car per year without a vote of the citizens and in some cases, by an unelected board

Taxes the Poor to Subsidize the Rich

• By using sales taxes and car taxes, all taxpayers pay, but very few will benefit
• Sales taxes take up a disproportionate percentage of lower and working classes’ income
• If the most ambitious estimate of Triangle rail ridership – 25,000 per day – is true, you could buy every potential rider four Toyota Priuses for the same amount of money
• Or, you could buy each of those people a Prius and buy 2000 miles more roadway for them to drive on

• Transit lines would be designed to serve mostly upper-income areas (RTP, Cary, Downtown Raleigh, Chapel Hill)
• “Reverse Robin Hood” – tax the poor to subsidize the rich who already have buses available but choose not to ride them

No Need for Additional Taxing Authority

• Counties already have ¼ cent sales tax option from the Medicaid swap that can be used for public transportation or any other public use.  If counties believe public transportation is a priority, they can use existing taxing authority to increase taxes

Will Not Relieve Congestion

• Trains are the most inefficient method of relieving congestion.  Building new roads, HOV lanes, rapid bus transit are all less expensive and relieve more traffic congestion
• Triangle Transit Authority’s (TTA) most optimistic projections estimate 25,000 to 30,000 rider trips per day, roughly 2 percent of the total current Triangle population
• Less than 1 percent of congestion will be relieved. Some light rail traffic is lunch-goers and sightseers.
• Wake County Commissioner Tony Gurley admits it will not relieve congestion: “I don’t expect the transit plan to create a significant reduction in traffic on the roads." (N&O 1/26/08)

Conclusion

HB 148 raises taxes on all residents to provide a massive government subsidy for a select few wealthy individuals.  It will do very little, if anything, to actually reduce congestion and ties counties hands to provide public transportation services while our state’s roads are in disrepair.

The Civitas Institute generally supports giving local authorities more control over transportation options. However, local control must also come with maximum flexibility to use scarce transportation dollars in the most efficient manner.