Editorial: Wrong road on taxation

Published 12:00 am Wednesday, December 17, 2008

If simple solutions are usually the best ones, then we should beware of complicated taxation mechanisms like a proposal to charge N.C. drivers according to miles traveled.
This proposal is among several devised by the 21st Century Transportation Committee, a study group tasked with finding ways to find more reliable and equitable revenue streams to address a highway funding shortfall that could approach $65 billion. It’s envisioned as a way to replace, or supplement, the existing state gas tax, which is generating less revenue as motorists move to more fuel-efficient vehicles and drive fewer miles.
At first glance, a tax based on miles traveled might appear to be a fair way to raise highway revenue, since those who drive the most would pay the most. But it holds a host of complications. How would it apply to the millions of miles accumulated by out-of-state drivers rolling through North Carolina, who presumably would be exempt from this in-state tax? What about the N.C. residents who commute each day to jobs in adjoining states? How would it affect motorists who use their cars for regular volunteer work, such as delivering Meals on Wheels or serving as on-call chauffeurs for relatives needing frequent medical attention? And finally, unless you equip vehicles with tinkerproof odometers that feed directly into revenue databases, how would a pay-by-the-mile system avoid creation of new bureacratic offices and the possibility of new sources of fraud?
It may be that we’ll reach the day when technology can answer these questions and make a useage-based system more feasible, but we aren’t there yet. In contrast to this potential bureacratic nightmare, the Transportation Committee backed a couple of ideas that would boost road revenues through straightforward reforms. One solution would end transfers of money from special road funds to the general fund. The other would reduce administrative expenses and streamline the administration of the Department of Transportation. (We’d also submit another common-sense reform that citizens have suggested to Gov.-elect Bev Perude: Stop awarding Board of Transportatoin seats based on geography ó and political connections.) Solutions don’t get much simpler than that.

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