Thursday, May 11, 2006

Gas Tax

The New York Times had an article today about New York State planning to lower its gasoline tax. The article had many telling excerpts:
[I]n reality, while a steep cut in gas taxes would almost surely be felt, modest cuts could be lost in the distribution chain from the oil companies to the gas stations, several oil industry officials said. And that could leave at least some of the tax relief in the hands of the big oil companies that have been reporting record profits.
Great, in other words, the state can cut its gas taxes and do nothing to prevent the oil companies from just keeping the difference.

In any case, cutting the gas tax is probably a bad idea because it encourages further driving on already congested downstate roadways. As Senate Majority Leader Joseph Bruno claimed, the high price of gasoline is apparently causing a windfall of revenue to flow into state and local treasuries:
"State and local governments should not reap a revenue windfall from high gas prices," said Joseph L. Bruno, the Senate majority leader, a Republican.
Why not cut a different tax then? A better solution would be to temporarily (I'd argue permanently) cut utily taxes and income taxes, both of which are high in New York State. As David Owen argued in his rather interesting piece "Green Manhattan" in the New Yorker back in 2004, it is pretty unlikely that utilities are responsible for anywhere near as many greenhouse emissions as driving a private automobile.

Alternatively, this might be a good time to consider better uses of our states' revenue. Oil supply probably isn't going to increase at the rate demand increases. While the federal government does little to nothing to actually offer workable solutions to the gas crunch, we in New York spend billions of dollars on entitlements to people unable to compete in the workforce or find jobs. Since we're spending this money anyway, we may as well direct it towards projects where people can do useful work. People consuming public subsidies represent a massive untapped labor force that could be trained to dig much-needed cut-and-cover subway tunnel extensions in the outer boroughs of New York City, or even for bring transit lines to surrounding metropolitan counties (which generally depend on local commuter rail and bus service for public transportation).

Given how population distribution patterns have changed in the past 102 years since the first subway was built under Manhattan's streets, a regional iniative might even be in order. Given its high transit usage, the New York metropolitan area is one of the few places that might actually be somewhat immune to problems with gas prices assuming transportation policy is crafted carefully. However, it's important to note that the subway was created at a time when Manhattan was the borough with the highest population, much higher than it is today. New transportation planning should call for better, less Manhattan-centric, service in the rest of the region.

Ironically, New Jersey, notable for its suburban sprawl over the past few decades, has been making bold strides in improving its public transportation infrastructure, and making it usable. A partnership with New Jersey could even allow the slow extension of PATH service to the other regional airports (Kennedy and LaGuardia) or to Staten Island and even Westchester and/or Nassau Counties. Another potential partnership, although politically complicated and far less useful, would be expansion of the Hudson-Bergen Light Rail system into Staten Island. Such projects offer the prospect of decreased traffic congestion, reduced dependency on foreign oil, and easier commutes for residents and visitors alike, all the while making the transit systems already in place much more useful.

Slow, incremental expansions to the subway and PATH systems offer the prospect of reducing the amount spent on social services while allowing those depending on such services to do useful work for a dignified wage. Resources are not only tied down in food stamps, medical benefits, and welfare subsidies, but also in administration of these programs. Retraining these people offers them the prospect to learn new skills, which might very likely be useful in many other places in the future, while investing in infrastructure improvements that can only stimulate economic growth in the long run, especially if oil prices keep skyrocketing.

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