http://www.kitv.com/news/hawaii/TheBus-changes-starting-this-Sunday/-/8905354/14419032/-/sgnpriz/-/index.html

First, it’s not a tax. A tax would be something like the GET that everyone in Hawaii pays for the construction (and operation?) of the rail project that a minority of people will use (or, in some scenarios, virtually nobody will use).

It would be a user fee. Those who use the service would pay for it, and no one else. Just like when you want to camp at certain State parks, you pay a user fee.

All public transportation and energy costs –relating to things like the PUC, the transportation department, the highway patrol, paving roads, etc. — should be paid for with a user fee imposed on fuel.

Second, this is not a hidden fee. The whole point of this is to make costs explicit.

We keep hearing about the “hidden costs” of petroleum dependence, such as having a $60 billion/year US military presence in the Middle East, the health costs of air pollution, the cost of subsidizing the auto industry, the costs of roads and suburban infrastructure, etc., etc.

But the way to deal with these costs is to have users pay for them — not pile on more costs.

In part, this is basic economics. Both justice and economic efficiency demand that “negative externalities” (e.g., pollution) that are incurred by “third parties” (i.e., neither buyer nor seller) be “internalized” via state action (i.e., the seller must be compelled by law to compensate victims). From the wiki:

In economics, an externality, or transaction spillover, is a cost or benefit that is not transmitted through prices and is incurred by a party who did not agree to the action causing the cost or benefit. The cost of an externality is a negative externality, or external cost, while the benefit of an externality is a positive externality, or external benefit.

In the case of both negative and positive externalities, prices in a competitive market do not reflect the full costs or benefits of producing or consuming a product or service. Also, producers and consumers may neither bear all of the costs nor reap all of the benefits of the economic activity, and too much or too little of the goods will be produced or consumed in terms of overall costs and benefits to society. For example, manufacturing that causes air pollution imposes costs on the whole society, while fire-proofing a home improves the fire safety of neighbors. If there exist external costs such as pollution, the good will be overproduced by a competitive market, as the producer does not take into account the external costs when producing the good. If there are external benefits, such as in areas of education or public safety, too little of the good would be produced by private markets as producers and buyers do not take into account the external benefits to others. Here, overall cost and benefit to society is defined as the sum of the economic benefits and costs for all parties involved.

Of course, the tricky part is figuring out just what the societal costs of an industry are (e.g., figuring out the cost of the Chernobyl nuclear accident, which some say killed thousands, while others claim have killed or will kill a million people at least). But the cost of government services is better known, and fuel fees should pay for all government costs related to transportation and fuel consumption.

The other economic aspect of this is the ‘Jevons paradox’.

The economist W.S. Jevons pointed out that greater technological efficiency in production leads to lowered costs of a product. But instead of promoting reduced consumption of natural resources in production, the lowered costs only stimulates consumption of the product — often to the point where consumption of resources exceeds earlier levels of consumption. This is what happened in the 1990s, where conservation efforts in part helped to drive down the cost of oil to record lows — only to see consumers rush out and buy SUVs and giant trucks. Likewise, if a hypothetical “miracle energy source” like fusion power were to emerge to provide ridiculously cheap and safe energy, the price of oil would probably collapse to zero; but shortly thereafter, in places like India and China, oil consumption would roar upward and oil prices would be expected to return to or exceed current levels. Moreover, this would also lead to more consumerism in general, more population growth, etc, etc.

This is one reason why providing transportation infrastructure “options” is so wrongheaded.

If a rail system is built and people do flee their cars and flock to the rail (cross your fingers and hope to die), the effect will be temporary. Traffic will thin out and … soon enough people will buy more trucks and cars and hit the highway, perhaps worse than ever. Also, this would lead to more people buying houses out in the fringe suburbs, more ag lands getting zoned for suburban sprawl, undermining tourism, etc., etc.

So all these big projects (energy, transportation) are really ways of having the private costs of poor and wasteful lifestyle choices (i.e., living in fringe suburbs) shifted to the state and taxpayer — when, in fact, current costs to the public should be shifted back onto consumers (in fringe suburbs) in the form of user fees (imposed on fuel use).

Again, there are at least two ironies here.

One is that if the state does “successfully” provide “transportation options” (i.e., rail) that will be used, then current private costs (traffic) will eventually get worse (after a ‘false Spring’ in which things seem to get better). Both public and private costs will then increase. This could set up society for a disaster, illustrated by what happened during the oil price hikes in 2008: Just when drivers were ditching their cars for mass transit, governments, drowning in debt, were cutting back mass transit. The solution is to move away from both private and public commuting.

The other is that these big projects are tantamount to forms of “state-subsidized consumerism” rather than forms of environmentalist policy.

One can see this in the rhetoric surrounding these projects.

When it comes to private consumerism, customers in Walmart marvel, “Gee whiz, look at that plasma television! The blacks are so much blacker! I want one.”

When it comes to these big projects in Hawaii, certain vocal citizens marvel, “Gee whiz, look at those wind turbines! Looks like something out of ‘Star Wars’! We need those.”

It’s consumerism by other means. It’s greenwashing.

To address your main point, again, I am all for making the bus free!

But this subsidy should be paid for with fuel user fees, not with taxes imposed on all citizens. With user fees imposed on fuel, taxes could be lowered for everyone, rewarding in particular those who are less wasteful.

This is not a good development after the city council recently discovered the use of $244 million of 5307 bus funding to go instead to build the rail project.

Could this be only the beginning of the cannibalizing of Oahu public bus service just at the very start of construction on the $5.2 billion dollar rail fantasy?