Funding Public Transportation/Infrastructure
Center for the Study of Economics - Company Message
RSS Follow Become a Fan

Delivered by FeedBurner


Recent Posts

Land Value Taxation in Jamaica: Now More Than Ever
Part 1, Land Value Taxation: Politics, Persuasion, and Practicality - A How-To
2016: Another Year of Advances and Retrenchment
Part 2 - Land Value Taxation: Politics, Persuasion, and Practicality - A How-To
Podcast Features Millbourne, PA, LVT aids town in fiscal rebirth

Most Popular Posts

Noted UK Think Tank: Tax Land Values
Eliminating the property tax? It must not happen, but we’ll see what happens.
Altoona, PA: City tax wholly on land values = normality
Land Value Tax in Britain: Progress While the Rear Guard Digs In
Dr. Herbert Barry's Proposal to Really Reassess Allegheny County

Categories

Act 47
Africa
Agricultural Policy
Allegheny County
ALTER
Altoona
Australia
Australian Capital Territory
Baltimore
Berkshire
Canberra
Clairton
Connecticut
Connecticut General Assembly
Current News Item
de Blasio
Economic Development
Economic Policy
Economic Rent
Economist
Ed Vargas
Education
EPA
Federal Tax Policy
Fiscal Policy and Taxes
Frederick
Free Markets
Gentrification
George Osborne
Global Taxation
Harrisburg
Hartford
Healthy Communities
Housing
Housing Policy
Hurricane Sandy
India
Ireland
Jamaica
Jeffrey Berger
Jimmy Tayoun
Justin Skariah
Kenyatta Johnson
Lancaster
Land Policy
Land Value Tax
Lanesborough
Larry Deutsch
Law and the Constitution
Legislation
Len Fasano
Liberal Democrats
Local Government
Maria Quinones-Sanchez
Martin Looney
Maryland
Massachusetts
Matt Ritter
Matthew Ritter
Mayor Rick Gray
Michael Kinsley
Michigan
Millbourne
Model Legislation
Monroe County
Montreal
Moonachie
Namibia
National Tax Policy
New Jersey
New London
New York City
NY
Oregon
Parking and Transportation
Patricia Dillon
Pennsylvania
Philadelphia
Pittsburgh
Portland
Property Assessment
Property Tax Reform
Public Health
Public Opinion
Public Resources
Public Works
Regional Tax Base Sharing
Regionalism
Regressive
Rhode Island
Rochester
Roland Lemar
Sales Taxes
Scranton
Senator Jan Malik
Sin Taxes
Smart Growth
Soda Tax
Taiwan
Tax Exemption and Abatment
Thomas Piketty
Titusville
Tom Kramer
Transportation Funding
Transportation Policy
Uncategorized
United Kingdom
Urban Blight
Urban Rejuvenation
Urban Tax Policy
Vince Cable
Wage and Income Taxes
Wales
Wealth
Wilson Goode Jr.
powered by

Incentive Taxation

Funding Public Transportation/Infrastructure

Value capture is a recognized tool around the world to pay for transit projects without causing economic distortions or drag that usual forms of taxation impose. Value capture is also a benefits-received concept for transit funding.  From Australia to Hong Kong to Vancouver, value capture has proven to be reliable source of public revenue that is tied directly to the project itself.

The Commonwealth of Pennsylvania has in the past funded infrastructure and mass transit projects through such vehicles as the gasoline tax, the general fund, and some dedicated special taxes such as a sales tax.  I refer to the Allegheny County practice known as the "drink tax."  This method of funding transit  did not connect the revenue source to project expenditure, leading to much controversy and resentment by a significant sector in the business community.

Value capture on the other hand – if designed correctly – directly ties in the revenue source to project expenditure and finally to the project itself. How? As literally dozens of studies have concluded through empirical research, property values (specifically land values) increase dramatically near transit nodes.  The literature on this phenomenon is now nearly 100 years old and counting. Most recently, the University of Minnesota examined various options for funding public transportation/infrastructure and recommend it very highly the concept of land-based value capture to fund projects.  One recommendation, the land value tax has been usedextensively in the Commonwealth of Pennsylvania since 1911.  We have experience with the land value tax inour state, and it has proved its worth when given the chance. 
 

The question will arise: why are land values in particular a a wise public policy option?  Again, the answer is cause-and-effect. Most often, the general fund or a gasoline tax will pay for a cloverleaf exchange on a highway. Yet, because of the contribution of hard-working citizens and productive business, the benefit of that cloverleaf go specifically to those landowners who were lucky enough to be in the right place at the right time when the highway exchange was built.  In essence, they are enriched at the expense of the public in the Commonwealth. 

Similarly, the same effect applies to mass transit.  Again, the literature is decades old  . When the BART system in San Francisco/Oakland was constructed land values increased dramatically in the particular spots where BART stops were constructed.

The increase in land value can be projected before project approval, and can be measured quite accurately post project completion. 

0 Comments to Funding Public Transportation/Infrastructure :

Comments RSS

Add a Comment

Your Name:
Email Address: (Required)
Website:
Comment:
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment