StamfordCT

How Should We Pay for I-95, I-84, I-91 and the Parkways? High Fuel Taxes, or Tolls?

When I moved to Connecticut in 1975, the Connecticut Turnpike and the Merritt Parkway both had tollbooths.  Some years ago, after a terrible accident in which a dozing truckdriver rear-ended cars waiting to pay their toll at Stratford, killing passengers in at least one car, the toll booths were removed.

Now the state, like most others, is strapped for cash, and there are calls to again use tolls to help pay for the roads.  But there is a noisy constituency which resists tolls.

Connecticut has among the highest taxes on gasoline in the US, and also the highest pump prices.  According to  http://www.connecticutgasprices.com/tax_info.aspx, we pay 62.5¢/g [cents per gallon] on gasoline, and 61.4¢/g on diesel.  California's are the highest at 63.9 and 72.0¢/g (necessitated in part, I'm sure, by California's 30 year old Proposition 13 which keeps the property taxes of old-timers to a minute fraction of 1% of the property's market value).  Alaska's are the lowest, at 26.4 and 32.4¢/g.  (These include Federal excise taxes of 18.4¢/g for gasoline and 24.4¢/g for diesel.)

Here are the surrounding states:

Connecticut       62.5             61.4

Massachusetts     41.9¢/g       47.9¢/g

Rhode Island         49.4           55.4

New York            59.6           64.7

New Jersey         32.9           41.9

Pennsylvania        50.7           63.6 

Vermont             38.4           50.4

New Hampshire   38.0           44.0

Why did I list so many states? Because 18-wheelers have large fuel tanks -- as much as 300 gallon capacity.  That gives them the option to fill them when prices are good, and avoid buying in states with high prices.   At 5 mpg, 300 gallons gives a 1500 mile range.

Here are two tables from http://www.icpa.org/consumer_motor.htm showing Connecticut's prices compared to nearby states.  First gasoline:

State	State Excise Tax	Other State Taxes	Federal Tax	Total Taxes Per Gallon	AAA Average Retail Price/Regular Gasoline - 5/8/09	Retail Price Minus Government Taxes
NY	$0.0805	$0.3204	$0.1840	$0.5849	$2.29	$1.71
CT	$0.2500	$0.1242	$0.1840	$0.5582	$2.28	$1.72
RI	$0.2700	$0.0400	$0.1840	$0.4940	$2.19	$1.70
ME	$0.2460	$0.0150	$0.1840	$0.4450	$2.20	$1.76
MA	$0.2100	$0.0250	$0.1840	$0.4190	$2.13	$1.71
NH	$0.1800	$0.0260	$0.1840	$0.3900	$2.09	$1.70
VT	$0.1900	$0.0100	$0.1840	$0.3840	$2.11	$1.73
NJ	$0.1050	$0.0400	$0.1840	$0.3290	$2.02	$1.69

And then Diesel:  

State	State Excise Tax	Other State Taxes	Federal Tax	Total Taxes Per Gallon	AAA Average Retail Price/Diesel Fuel - 5/8/09	Retail Price Minus Government Taxes
NY	$0.0850	$0.3230	$0.2440	$0.6520	$2.61	$1.96
CT**	$0.4340		$0.2440	$0.6780	$2.60	$1.92
RI	$0.3000	$0.0100	$0.2440	$0.5540	$2.47	$1.92
VT	$0.2500	$0.0100	$0.2440	$0.5040	$2.45	$1.95
MA	$0.2100	$0.0250	$0.2440	$0.4790	$2.42	$1.94
ME	$0.2880	$0.0700	$0.2440	$0.6020	$2.41	$1.81
NH	$0.1800	$0.0160	$0.2440	$0.4400	$2.27	$1.83
NJ	$0.1350	$0.0400	$0.2440	$0.4190	$2.22	$1.80

Long haul truckers can save nearly 40 cents per gallon by buying their diesel in New Jersey.  So the effect of collecting 43 cents per gallon for CT compared to NJ's 13.5 cents is to shift the cost of paying for CT's highways onto CT's short-haul truckers, who seldom leave the state.  Long-haul gets a free ride.

"Never tax anything
That would be of value to your State,
That could and would run away, or
That could and would come to you."

For several years, I made a weekly trip from southwestern Connecticut to suburban Philadelphia.  I'd fill my gas tank at Ft. Lee, NJ, in the morning, and again as I returned.  I seldom bought any gas in Connecticut.  Most drivers of passenger cars don't have that opportunity.  But trucks certainly do.  I paid a lot of tolls, and always thought I was getting a good deal. 

Back to the subject of tolls: Connecticut has two main east-west interstates: I-95, which runs along the southern tier, and I-84, which runs from Danbury at the west, through Hartford and then northeast to meet up with the Massachusetts Turnpike en route to Boston.  We charge tolls on none of them.   Let's look at what some nearby states charge.

Massachusetts  Exit 1 to 14 (Stockbridge to Route 128/I-95)  120 miles  Auto:  $2.70; Truck 5 axles  $15.15;  Bus: 3 axles  $7.15

New Jersey: Exit 1 to 18: 113 miles  

• Auto: Cash $9.05;   EZPass weekday off peak $6.80; EZPass weekend and peak $9.05
• Truck, Class T2: Cash $18.60;  EZPass weekday off peak $16.15; EZPass weekend and peak $17.00
• Truck, Class T6: Cash $37.15;  EZPass weekday off peak $32.25.15; EZPass weekend and peak $33.95
• Bus: Cash $14.35;  EZPass $13.10 at all times

Garden State Parkway: 172 miles, $3.50

PA Turnpike: end to end 358 miles.

• Passenger car: $24.70 plus $3.75 for the Delaware River Bridge
• Truck Class 3 with 4 axles: $45.00 plus $11.25 for bridge [15,000 to 19,000 pounds]
• Truck Class 5 with 4 axles: $73.75 and $18.75 for bridge  [30,000 to 45,000 pounds]
• Truck Class 8 with 4 axles: $175.00 plus $18.75 for bridge  [80,000 to 100,000 pounds]

PA I-80:  PA proposes to put in "Open Road Tolling," which will not charge passenger vehicles until they pass the second collection point, which is expected to exempt 70% of all cars entering and exiting I-80.  Gantries will be placed approximately every 30 miles.

Car rate in 2010: $0.08 per mile; 5-axle trucks $0.30 per mile = $25 and $93 for the entire length of I-80 in PA.

Suppose Connecticut charged trucks $0.30 per mile on I-95.  The distance is 112 miles.  That would be $33.60 from every truck.  To collect $33.60 in state taxes via a state tax of .43 per gallon of diesel, we'd need to sell an average of 78 gallons of diesel fuel to each trucker passing through.   At 5 mpg, a through truck uses 22 gallons to get across CT, and that represents less than 10% of a full tank.

It seems to me that imposing a toll on CT's major highways, at least for trucks, makes a lot of sense. 

And my opinion is that cars ought to pay tolls as well, particularly at rush hour.  I'm intrigued by the I-80 approach, exempting some drivers, particularly off-peak.  By shifting some users away from rush hour use of the roads, we may be able to make travel much smoother for all.  EZPass technology makes this very doable.  (Economics Nobel prize winner Bill Vickrey anticipated EZPass, and saw how it could be used to make things work better.)

I don't think we ought to be asking drivers who live far from our major highways and who never use them to finance the main roads, particularly if we don't ask those who do use them to pay for them.

According to the Congressional Budget Office, large trucks do about 6 times the damage that a passenger car does.  Do we want to provide a free ride to those trucks?

User fees seem eminently logical and just.  Gas and diesel taxes can be part of that picture, but tolls should also be used.  I don't see a good reason to charge higher gas taxes than surrounding states do.  But we might be in a position to impose higher tolls, given the scarce alternatives.  Few trucks will detour around Connecticut in order to avoid a $20 or even $40 toll.  But they might time their trips differently, avoiding rush hour, if we gave them an incentive to do so and a place to park for a few hours near each entry to Connecticut.

Lawson Purdy: The Influence of Taxation on the Prosperity of Cities

Reprinted in The Public, October 6, 1906

THE INFLUENCE OF TAXATION ON THE PROSPERITY OF CITIES

A Paper Read by Lawson Purdy of New York
Before the League of American Municipalities,
in Session at Chicago, September 26, 1906.

In 1873, Enoch Ensley, a wealthy planter of Tennessee, wrote to Governor Brown asking him to call a special session of the legislature to amend the constitution so that changes could be made in the tax laws of Tennessee. The tax rate of Nashville was three and one-half per cent and of Memphis four per cent, and Mr. Ensley said that the burden on business was insupportable. Great land owner as he was, however, Ensley did not urge a search for new sources of revenue, but rather the application of the "rule or motto" which, he said, "It would be well for the State to adopt and have cut into the stone at the capitol (in large letters and have them gilded), in the Senate chamber, the hall of the House of Representatives and in the governor's office, . . . to-wit:

"Never tax anything
That would be of value to your State,
That could and would run away, or
That could and would come to you."

This rule laid down by Ensley has become an axiom, but before it can be applied the constitutions of about thirty-five States must be amended by repealing those despotic limitations on legislative power which are not found in the earlier constitutions, and which should find no place in the constitution of any free people. Because of constitutional and statutory restraints upon the power of cities we need discuss only what can be accomplished in most cities by executive officials under existing laws.

Conditions of Prosperity.

City officials often regard the city as apart and distinct from the individual citizens, and sometimes therefore uphold policies which appear to be in the interest of the city corporation, although opposed to the interests of the citizens. This is, of course, a short-sighted view. In reality nothing can be good for the city which is bad for the citizen, nor bad for the city which is good for the citizens. Again, many consider the interest of classes and speak of what will be advantageous to manufacturers or shopkeepers or land owners. This, too, is a mistaken attitude. Citizens should be regarded alike as men, and not as the owners or users of some kind of property. All depend upon the workers who render service for service, and it is fair therefore to consider the interest of all citizens as bound up in the interest of those who earn their living; and that city may be regarded as the most prosperous in which it is easiest and most agreeable to earn a living.

The interests of the city and of its citizens are identical. Nevertheless, they may be viewed from both standpoints.

Puzzles in Stamford's 2007 assessments

I'm finding some puzzling things in the October, 2007 Stamford assessment database, and wonder how they might be explained.

The Stamford Advocate property ... land, not buildings

A recent article in the Stamford Advocate announced the sale of the downtown Stamford property which was, until a few months ago, the home of the newspaper.  It began,

A Norwalk developer confirmed yesterday it entered into an agreement to buy the former Advocate building in Stamford and Greenwich Time building in Greenwich from Tribune Co. for an undisclosed amount.

Funding Infrastructure: A Dedicated Funding Stream

A recent article in the Stamford Advocate, Dodd touts transit-funding bill in Stamford (3/25)

STAMFORD - During an appearance yesterday at the Urban Transitway construction site, U.S. Sen. Christopher Dodd, D-Conn., called for major national investment in roads, trains, bridges and other infrastructure.

Dodd came to town to promote his bill that would set up an independent national bank for such projects. The bank would designate regionally significant projects for loans, loan guarantees or other financial help and issue tax-exempt bonds to finance them.

Dodd said the United States needs a national policy and a dedicated funding stream for maintaining infrastructure, rather than leaving it to politicians to fight for money for individual projects.

It may be a dry topic, but it's important, he said.

"It normally glazes over the eyes of the most determined listener," Dodd said. "I'm proud to be in a city that cares about it."

Is LVT the answer? It depends what the question is.

The title for this post was prompted by an article in the NYT about people not raised on farms deciding to become farmers, particularly in places near large cities.  It seems that local food was said to be the answer to a number of questions.  I'm generally in favor of it, but I'm not sure it is the answer to as many questions as its supporters claim.  That doesn't make "local food" a bad thing; just not the answer to as many questions as it might seem.

But the title for this post sprang to mind.  It seems to me that Land Value Taxation is the answer to a lot of very important questions.

Fixing Wages, and Fixing Housing Affordability -- for All of Us

By this, I mean fixing the problem of low wages -- wages insufficient to support an individual or a family in conditions we consider acceptable on a reasonable number of hours of labor per week. I don't mean minimum wage legislation, or living wage legislation, both of which I regard as well-intentioned but ultimately destructive for the community they intend to help.  I don't mean measures like the Earned Income Tax Credit, either.  It appears that people must jump through high hoops to get those dollars (which often seems to require professional advice, at a price), and then a significant portion of the money goes not to the wage earner but to his tax preparer/advisor, in the form of fees and interest.

Earmarks, nightlights and windfalls - Individual, or Community?

I've heard this point made a couple of times recently, but particularly liked the way Gail Collins expressed it in her recent column, George Speaks, Badly:

Besides being incoherent, this is a perfect sign of an utterly phony speech. Earmarks are one of those easy-to-attack Congressional weaknesses, and in a perfect world, they would not exist. But they cost approximately two cents in the grand budgetary scheme of things. Saying you’re going to fix the economy or balance the budget by cutting out earmarks is like saying you’re going to end global warming by banning bathroom nightlights.

The relative magnitude of earmarks relative to total federal spending or total discretionary federal spending may be rather small.  But earmarks do have tremendous potential to do good locally. They can fund projects that may not be feasible for local government to fund, which can contribute mightily to local economic activity and economic rent.

The question, I think, is what happens AFTER the earmark project. Will the local community that benefits from that federal spending collect the benefit from the local residents who are benefited, or will that benefit keep accruing to particular individuals, and continue to be just a nice permanent federal gift to them? 

The Taxpayer at 72nd and Madison

In a recent NYT, there is an article about the building on the southwest corner of 72nd and Madison in NYC. Twice in the article and once in the caption to the photos, the building is referred to as a "taxpayer" or "taxpayer-style building."

The article describes the 2 buildings which have occupied the 48' by 100' lot on the sw corner of 72nd and Madison: the first was a 5-story mansion built in 1894, which was occupied by an ex-wife of William K. Vanderbilt II.  On the northwest corner stood Louis Tiffany's grand house, and Gertrude Rhinelander was building her chateau, now the Ralph Lauren store, on the southeast corner.  The mansion remained a private home until 1951, when it was

... replaced with a two-story-high taxpayer-style building, designed by Boak & Raad with severe simplicity.

Ralph Lauren acquired the old Rhinelander mansion for its flagship store in 1986, and seven years later took over the taxpayer on the site of the Cutting house. It has operated a store there since then.

Affordable housing -- for all of us. What policies promote it?

Link: http://www.sun-herald.com/Newsstory.cfm?pubdate=030808&story=tp1ch5.htm&folder=NewsArchive2

A front-page article in the 3/8/08 Charlotte (County, FL) Sun entitled "Not Affordable Enough" speaks to some interesting and important issues regarding Florida's housing.  A few excerpts:

The current downturn in residential real estate sales has created the closest thing to a buyer's market Florida has seen since the 1990s.

While that might be great news for a Northern couple looking to retire in Punta Gorda or Port Charlotte with their life savings, Charlotte County's median home price -- about $175,000 according to recent Florida Association of Realtors figures -- is still a barrier for many local wage earners ...

Despite North Port's reputation as a haven for working families, the median sale price in the Sarasota-Bradenton market remains about $260,000

Referring to recent problems in the housing market,

"It's a blip on the screen really, and in a year, we're going to be thankful that we did some investing in affordable housing," said Ron Thomas, executive director of Enterprise Punta Gorda, the city's economic development bureau. "When everybody says that there's plenty of affordable housing, we have to qualify that by saying that there is plenty of affordable housing for people who are in the 80 percent or above the median income. This doesn't have any positive effect for anybody in the 30 to 80 percent median income bracket."

"Even as low as (housing) has come down, it still might not suit firefighters, police, and school teachers. They're still struggling," said Bill Albers, Punta Gorda city councilman. Albers is the council's liaison to the Punta Gorda Housing Authority.