Fitzsimon File

Funding gaps and double taxation

Tuesday, December 2nd, 2008

By Chris Fitzsimon

You would think given the current political climate and state of the economy a proposal that adds hundreds of millions of dollars to state indebtedness without a vote, establishes double taxation on thousands of people, and allows a small group of unelected political officials to raise fees on their own would not be taken seriously. But that is exactly what is already in place in the state’s rush to build toll roads and the construction of the first one will begin soon in Wake County.

Charging people who already pay a state gas tax an additional fee to drive back and forth to work everyday amounts to double taxation, the last thing people struggling to make ends meet need these days.  Toll roads also obligate the state to pay off hundreds of millions of dollars that will be borrowed to build the roads.

The General Assembly took $25 million out of the General Fund last session to pay off a loan that will build the Western Wake Expressway as the state’s first toll road. That $25 million is called gap funding, but it’s a gap that will last 25 years or more. The budget passed last year calls for another $24 million to be taken out of the budget next year for another toll road and money for another one after that.

The claims that toll roads pay for themselves are simply wrong. Taxpayers in North Carolina pay for them every year, and people who use toll roads like the Western Wake Expressway will pay for them again, as much as $500 a year under tolls currently under consideration.  That could increase at any time, judging from the experience of other states. Almost every week headlines announce that a state is considering a hike in the toll for a particular highway because a drop in use of the road is affecting revenues.

That actually creates an incentive for the state to encourage toll road use by making changes in existing highways, maybe even agree to a no compete clause if the toll roads are privately run, as the Burlington Times recently proposed.

Though supporters of toll roads always ignore the double taxation they impose, they are right that toll roads mark a major expansion of user fees to pay for state services. That’s an argument against toll roads, not something to celebrate. It is based on a philosophy that would affect public universities, museums, and other functions of state government in a fundamental way.

User fees have long been a goal of the anti-government crowd, who advocate dramatically higher admission at museums and state parks, the theory being that people who visit the facilities should pay for them and that people who don’t should have not to subsidize those who do.  

That discounts the fact the overall quality of life in the community is enhanced by having first rate museums and well-maintained state parks.

It is the same argument made to justify massive increases in tuition at the University of North Carolina, that students should pay the cost of the education they receive, not rely on the state to pick up a large portion of the cost.  

The ultimate goal is to sharply reduce taxes and eventually reduce, then eliminate the need for government to operate public institutions, leaving it all up to the individual and the exalted market.

User fees may have a place in state government, but it is a small and distinct one. But public universities, public schools, and public highways should be accessible to all regardless of the ability to pay.

There are plenty of other compelling arguments against charging people more to drive to work, particularly if the state succumbs to the temptation to turn management or even ownership of the roads to private interests.

Toll roads also continue the tunnel vision transportation philosophy that has helped create the current mess, reinforcing the notion that we can superloop our way of the transportation crisis at the expense of public transit, land use planning, and other more reasonable approaches.

Maybe it is too late to stop the Western Wake Expressway toll road, though it’s worth the incoming Perdue Administration considering it. At the very least the new governor and progressive members of the General Assembly ought to stop the double taxation, unwise shift to user fees, and potential privatization of vital state infrastructure before things go any further.

The state has gone far enough down the wrong road.

 

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