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The Car Tax vs. the RIPTA Tax

The attitude of public officials towards transportation spending could not be worse.

Recently, Speaker of the Rhode Island House Nicolas Mattiello, who narrowly won reelection in his western Cranston district, promised as a top priority to repeal the Rhode Island car tax.

Support for repealing the car tax has had a mixed political appeal: some progressives have argued that the tax is regressive. I have argued on many occasions that it is not, and pointed out the regressive nature of some attempts to modify car taxes at the state or local level. Essentially, driving (and the necessary infrastructure that goes with it) is expensive, and political promises to pretend that that is not the case are about subsidizing drivers. But the costs don't go away, so they just are then passed on to other taxpayers. While lower-middle class people (and some low-income people) may feel the squeeze from the car tax, the proportion of very poor, disabled, elderly, and very young people who do not drive is greater than those who do. Cutting the car tax turns out to be a great way of making taxes more regressive.

Robert Amman, a Rhode Island resident who wrote to the Projo, summarized the bait-and-switch nature of the tax change. Amman seems to be more inclined to support lowering the car tax than I would be, but he's right-on about what will happen if the tax is lowered:
The money lost by eliminating the tax will have to come from somewhere, as state government has come to rely on the income stream. And the state has done little to nothing to cut expenses. What will happen is that the cities and towns which rely heavily on income from the car tax will be left with no choice but to raise local property taxes to replace it.
The attitude of public officials towards charging drivers a user cost for their vehicles' impact on roads is very different than the indifference shown to RIPTA users, who recently received what one advocate called a "stay of execution" for fare increases. The cuts were first proposed as part of Governor Gina Raimondo's budget earlier this year. It's unclear if fare increases will be prevented by a change in the budget going forward.

In full disclosure, I've written on the fare issue a few times, and in each case have emphasized that I think RIPTA is between a rock and a hard  place on the fare issue. While the design of many routes forces RIPTA to waste valuable worker time and vehicle wear going to far-flung suburban stripmalls, core service is not as frequent or reliable as it should be. Asking the agency to give free rides to some time-rich but money-poor individuals ignores the bigger problem of agency failures for time-poor but money-poor riders. If the fares are kept free, it should be the state that pays. RIPTA should not re-orient its internal spending in a way that could cut service.

from RI Future

But when you put the two issues side by side, it really shows the way that state officials think. While RIPTA use reduces traffic congestion, road wear, and pollution, driving (and the expanded roads that go with our addiction to it) cost taxpayers more money. Yet who pays? And who does not?

Meanwhile, Rhode Island Department of Transportation proposes adding complication and expense the I-95 "Viaduct", a section of road that ought probably eventually be removed entirely from Providence's downtown. The new expansion proposal stands alongside a deal made between state and Providence officials to rebuild the 6/10 Connector highway as a "parkway" which maintains much of the expense that might have been spared on the project if it had been built as the boulevard outside engineering experts proposed. Drivers hurting from car taxes should ask why state DOTs are so inclined to increase the number of financial liabilities they have while they complain that they do not have money to take care of what's already on their plates.

However we slice it, Rhode Island politicians are playing a dangerous game: the state continues to increase its costs on projects that out outdated, but undercuts the social safety net for the most vulnerable. Meanwhile, state officials are offering "free lunch" to drivers in the hopes that they'll look the other way on the ponzi scheme this financing plan really is.


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