Federal Gas Taxation – A Rural Com m unity Analysis Mary McQuiggan Sarah Helen McConnachie David Pelunis-Messier Tim othee Neron-Bancel Ajay Gupta April 26th, 2006 Policy Brief Raising the Gas Tax
Raising the Gas Tax � Current gas tax in the United States: 18 cents � What is proposed here is an increase of such tax to 2 dollars per gallon � The idea is to change consumer preferences/ behaviors � Dryzek would call this an example of Administrative Rationalism (Dryzek, 2005), in which issues are dealt with in a bureaucratic fashion within the public arena, and solutions are administered using rules and documentation. April 26th, 2006 Policy Brief Raising the Gas Tax
Raising the Gas Tax � Since 2004, trust in government has declined by statistically significant margins in 12 of the 16 countries for which tracking data is available [ including US] . � Suri, S. 2005. Global Survey: Who Do You Believe in Anymore? Inter Press Service, December 15, 2005. � the main explanation for economic discontent is that it's hard to convince people that the economy is booming when they themselves have yet to see any benefits from the supposed boom. Over the last few years G.D.P. growth has been reasonably good, and corporate profits have soared. But that growth has failed to trickle down to most Americans. � Krugman, P. The Joyless Economy. The New York Times. December 5th, 2005 April 26th, 2006 Policy Brief Raising the Gas Tax
Gas tax rates for developed countries 3.50 3.00 2.50 US $/gallon 2.00 1.50 1.00 0.50 0.00 New Zealand Australia Italy Canada Poland Japan Austria Ireland Belgium Norway Netherlands Germany US Czech Republic France UK unleaded gasoline diesel for non-commercial use April 26th, 2006 Policy Brief Raising the Gas Tax
An International Perspective: case studies � European Conference of Ministers of Transport � EU prescription to charge by “space and time” � GPS systems being developed in Oregon for use in US to track miles traveled and locations visited � Effective methods of cutting down traffic in London � Minimum tax levels set to keep commercial transport within certain countries April 26th, 2006 Policy Brief Raising the Gas Tax
WHY THIS WON’T WORK April 26th, 2006 Policy Brief Raising the Gas Tax
Rural Communities Basic Rural � � Developed Rural Urban Boundary Rural � � Developed Rural: Major population center � Agriculture and natural resource economies � Industrial and service jobs in Cities � Stable or growing populations � Diverse transportation needs � April 26th, 2006 Policy Brief Raising the Gas Tax
Rural Transportation � Concerns � Access to regional services � Farm-to-market access � Funding difficult to find � Unavailability of public transportation choices � Characteristics � Long distances between population centers � Steep grades � Mountain passes � Dramatic weather events � Dispersed systems � High cost of maintenance and construction April 26th, 2006 Policy Brief Raising the Gas Tax
April 26th, 2006 Policy Brief Raising the Gas Tax
Consumer Reactions � Interview conducted at Farmer’s Market in Ithaca NY � Mostly negative consumer feedback towards a gas tax � “I wouldn’t be able to care for my elderly parents who live in Buffalo” � “Its all a hoax. The government is not getting any more of my money. . Just so they can line their own pockets” � “Why hasn’t the government focused more on public transportation?” � “I depend 100% on my vehicle living in a rural area” � “I would have to completely change the way I live.” April 26th, 2006 Policy Brief Raising the Gas Tax
Consumer Reactions Con’t Shift of values when considering the gas Tax Personal/ Self Interest Citizen/ Public Interest April 26th, 2006 Policy Brief Raising the Gas Tax
Consumer Reactions Con’t � Economic Rationalism � Mistrust in government entities � Gas as an inelastic commodity � Scientific research unnecessary and costly � Financial crisis due to inelasticity of fuel usage � Administrative Rationalism � Sacrifice livelihood for the public good and reduce dependance on gas � Migration to urban areas to find work April 26th, 2006 Policy Brief Raising the Gas Tax
Reaction from Businesses � It takes 10 calories of fossil fuels to produce 1 calorie of food � In rural communities, greater distances and equipment is less efficient, leading to greater economic impact of higher gas tax April 26th, 2006 Policy Brief Raising the Gas Tax
Reactions from Businesses � 2005: In Seattle, 420,000 signatures are collected in 32 days to repeal a 9.5 cent increase in the gas tax � Reducing our competitive advantage abroad could force the US government to increase subsidies April 26th, 2006 Policy Brief Raising the Gas Tax
Finding the Right Solution � Lack of trust � Need for Funding � Yet US government refuses “European” style of tax � Reducing our dependence on fuel � Tax creates funds for research � An already overdue move towards self regulation April 26th, 2006 Policy Brief Raising the Gas Tax
A Gas Tax Managed by Communities � We must update the gas tax to a model that will be effective in the United States � Large rural population � Urban sprawl � Socio-economic diversity gradient � Proper allocation of revenue � Implement Epoch III initiatives: � Local councils for community based management � Nestedness between local, state and federal gvts. � Social Capital: community leaders and education April 26th, 2006 Policy Brief Raising the Gas Tax
A Transition? April 26th, 2006 Policy Brief Raising the Gas Tax
April 26th, 2006 Policy Brief Raising the Gas Tax
QUESTI ONS??????? April 26th, 2006 Policy Brief Raising the Gas Tax
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