Herald -- An Opposing View on Measure Z
By DAVID R. HENDERSON
Article Last Updated: 10/12/2008 01:46:10 AM PDT
Many of the people who say they hate taxes are advocating yet another tax on Monterey County residents. This time it's a one-half percentage point increase in the sales tax for "only" 25 years. The purpose: to fund various transportation projects favored by the Transportation Agency of Monterey County (TAMC).
There are at least three good reasons to vote no on Measure Z, the measure that would impose these higher taxes for a generation.
First, it's very expensive. Many people in Monterey County and, indeed, in the United States in general, protested mightily against the Bush/Congress $700 billion bailout for Wall Street. That $700 billion means $2,300 per person in the United States. Guess what? The cost of Measure Z per person is comparable. The proponents of Measure Z expect it to bring in just shy of $1 billion dollars over 25 years. The present value (the equivalent in today's dollars of that stream of revenues) is about $500 million. Monterey County's population is about 400,000. That means that the per-person cost, in present-value terms, would be $1,250. This is more than half the per-person cost of the bailout. If the bailout had been $350 billion rather than $700 billion, Measure Z would have cost more.
The proponents argue, though, that this local sales tax revenue will generate more state and federal matching grants. But that's not a fact: it's merely their prediction. They'll be able to apply for these grants, but there are no guarantees Monterey County will get them. And when we consider the sorry state of California's state budget, with the huge deficit the state government faces, we should be skeptical about whether any matching grants will be forthcoming. Thus, reason No. 2 to vote no.
Now, you might say, "Well, at least we get some additional lanes on congested roads." Not necessarily. The third, and most telling, reason to vote against Measure Z is that we might not get additional lanes on net. It's true that there's substantial money in the measure for widening roads. But what the government giveth in some parts of the county, it taketh away elsewhere. Read the fine print. Fully one out of every five dollars in tax revenue will go to "Rapid Bus Corridors." In other words, lanes on major streets will be set aside for buses. That leaves less space for cars and trucks and could, therefore, lead to more congestion, not less. Traffic planners, with no irony intended, sometimes call such purposeful congestion "traffic calming." I ask you: When you're stuck in such a traffic jam, do you feel calm?
Many of us strenuously objected to the $700 billion bailout because it was good money, our money, thrown after bad. Measure Z is similar. Worthwhile projects are funded in Measure Z. But other parts of Measure Z create negative value by increasing congestion. We can't, therefore, even be sure that the result, cost aside, is a net increase in value. Sounds a lot like the bailout.
David R. Henderson is an economics professor at the Naval Postgraduate School, a research fellow with the Hoover Institution, and a resident of Pacific Grove.
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