Some Urban Problems Have Already Been Solved
Modern Municipalities Tax Bads, Not Goods
Here are excerpts from an interview appearing in the Milwaukee Journal Sentinel (Wisconsin, U.S.).
Dave Wetzel interviewed by Larry SandlerIn one of the world's most congested cities, motorists pay extra for the privilege of driving into downtown London at the busiest times. As vice chairman of the Transport for London board, Dave Wetzel was one of the architects of that system. His agency is in charge of streets, trains and ferries, and oversees buses, taxicabs and bicycling in the British capital. Wetzel was in Milwaukee on July 24 to promote land value taxation, the idea of shifting property taxes away from buildings and entirely to land.
Q. Could you outline how congestion charging works in London?
A. People driving to downtown were paying £5 ($9.25) when it was introduced in 2003. Now it's £8 ($14.79). The day starts at 7 a.m. and ends at 6:30 p.m. There are many discounts (with free passage for) disabled people, emergency services, buses and taxis, the military. The most popular channel (to pay), about one-fifth or more of all payments, is text messaging. There's also voice telephone . . . machines in petrol stations and sweet shops . . . and the Internet. Less than 1 percent pay by post. If you haven't paid by midnight, you've got another 24 hours to pay £10 ($18.49). If you haven't paid by midnight the second day, we send you a £100 ($184.92) fine. If you ignore it, it goes up. If you get too many, we can impound your car.
Q. What results have you found since it was implemented?
A. The immediate result was an 18 percent reduction of vehicles coming into the zone, over a 30 percent reduction of cars going into the zone (and) a 33 percent reduction in congestion. What we've proven is (that) you charge for a scarce resource and people use it more efficiently. The net revenue goes to buses, pedestrians and cyclists. Many motorists like it because their journeys are quicker. Crashes are down, pollution is down within the zone and cycling has doubled. And we're getting a 4 percent modal shift out of private cars into public transport.
Q. Congestion charging has been discussed in New York City. Do you see a future for this idea in U.S. cities?
A. In our city, it's not the only tool. The mayor's strategy includes policies to discourage driving (and) to encourage modal shifts, like marketing of public transport and parking control. For a city like New York, if they were minded to use congestion charging, it needs to be part of a total package. It needs to be their own package. They need to consult with the people, not just once but several times. And you need a political champion. We never would have achieved it without our mayor (Ken Livingstone).
Q. In Milwaukee, the county bus system is supported partly by property taxes and has been stuck in a cycle of declining ridership, fare increases and service cuts. In London, you've also been dealing with funding shortfalls and fare increases. Do you have any advice?
A. All I can say is what I've seen in my city and other European cities. We've got to be confident and provide more supply (of buses). When you do that, you can improve the service. The service must be good. The information must be good. And the fares have to be simple.
Q. You're in town to discuss an idea called land value taxation. Could you outline briefly how that would work?
A. When we built one of our new rail lines, the land value close to the stations went up £13 billion ($24 billion). The public invested £3.5 billion ($6.5 billion) and the landowners got a tax-free gift of £13 billion ($24 billion). It seems to me that if you have an increase in value, the people should get the increase. The landowners do not create this wealth. (Under land value taxation,) every piece of land gets valued within its optimal use, its best use. Empty land would be brought into use. Urban sprawl would be reduced. Over 24 years (of a similar system) in Harrisburg, Pa., they've had an 85 percent reduction in empty sites. They've seen 5,000 new homes built. They've seen the number of businesses grow from 1,900 to just less than 9,000. Crime has been reduced 58 percent. Is the land value tax the only reason? No, but it's the key.
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