Recently, outgoing Gov. Dannel P. Malloy proposed an infrastructure package that may make Constitution State drivers think twice about having their rubber hit the roads.
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Recently, outgoing Gov. Dannel P. Malloy proposed an infrastructure package that may make Constitution State drivers think twice about having their rubber hit the roads.
The proposal includes a fee on new tire purchases, as well as an increase in the gas tax and statewide tolling. Closer inspection of the plan suggests that it may do little more than leave taxpayers feeling further strapped in a state that is already well-known for its heavy tax burden.
Connecticut's current need for infrastructure revenue is dire. The Special Transportation Fund, which finances the state's entire transportation system, is expected to go into deficit this year. For this reason, in January, the governor indefinitely suspended the allocation of $4.3 billion for infrastructure projects that would have assisted every town across the state.
Although Malloy's new proposal is ostensibly designed to make up this multibillion-dollar gap, its actual revenue-generation capability is woefully inadequate.
For instance, the governor's plan includes a $3-per-tire fee on new tire purchases. However, Connecticut has a grand total of only 2.8 million registered vehicles. Even assuming that each vehicle owner splurged on four new tires at the same time, the fee would only generate $12 per car — roughly $34.1 million in total.
This figure is even more negligible considering that the average car only needs new tires every few years — and even then, many people don't replace all four tires at once. Not only would such a tire fee raise little revenue, it would merely add insult to injury, given that 57 percent of the state's public roads are in poor condition — likely one of the main causes of tire damage in the first place.
Malloy's plan also calls for a 7-cent increase in the gas tax. However, with a nearly 40-cent-per-gallon tax already in place, Connecticut ranks sixth-highest in a state-by-state comparison of gas-tax figures. The governor's plan would put the state at No. 3.
Hiking the gas tax burden further is even more problematic in a region where drivers already can — and do — fill up their tanks in bordering states to avoid paying Connecticut prices. In nearby Massachusetts, the gas tax falls to 27 cents per gallon — more than 13 cents in savings without the proposed increase. It stands to reason that rather than raising the necessary revenue, the governor's proposal will simply send more drivers across the border in search of cheaper prices.
Based on projections from the administration, even if all these measures achieved their maximum projected revenue, Malloy still wouldn't even be a quarter of the way to his fundraising goal. What is certain, however, is that Connecticut residents will miss this money more than the state will be able to make use of it.
What's more, Malloy appears to be ignoring the wisdom of his residents. Only 16 percent of Connecticut residents would back higher gas taxes, while 30 percent opposed all the proposed payment options.
This lukewarm endorsement from state residents is indicative of a larger issue: Taxpayers may be willing to pay a little more in certain areas, but they want guarantees that they will see a return on their investment. Rather than look to another impractical and insufficient tax plan, Malloy should think outside the box — and choose a plan that might actually work.
To this end, a viable path to explore would be a tax on vehicle miles traveled (VMT). A VMT fee or tax system charges motorists a fee for each mile they drive rather than each time gas is pumped.
A VMT system is a more precise and fairer way to pay for roads because it is based on a driver's actual mileage, which is more directly related to their wear on the roads than a gas tax. From an infrastructure perspective, the main benefit of a VMT would be the increased revenue potential and stability.
The bottom line is that there are new and different alternatives to tire fees and gas taxes that have the potential to be far more effective at generating revenue — and far less apt to anger residents.
Nicolas John is the Northeast region manager at the R Street Institute, a free-market think tank based in Washington, D.C.
