Commuter Tax for Suburbanites?

[Plutonic Panda]

Do you support a tax for people living in the suburbs? I recently saw this article and thought it was pretty interesting.

COMMUTER TAX ON SUBURBANITES WORKING IN INDIANAPOLIS?

According to the Indianapolis Star, Mayor Greg Ballard of Indianapolis is poised to improve the slowing growing city's competitive position relative to the suburbs. The Star noted:

"Indianapolis may be a bigger draw than surrounding areas in attracting young residents, but it’s got a problem."

"Right as they begin raising families, many in their 30s split for the suburbs — taking their growing incomes, and the local taxes they pay, to bedroom communities in Hamilton, Johnson, Hendricks and other counties."

Mayoral Chief of Staff Ryan Vaughn told The Star that initiatives would include a focus on improving schools, and public safety, both of which had much to do with the decades long declines of US central cities. Vaughn told the newspaper that "Ballard wants to focus on strategies to compete more fiercely with suburban counties that draw — and keep — middle- and higher-income residents."

Certainly, the fact that central cities are far safer today than they were when New York's Mayor Rudolph Giuliani implemented his much copied policy of intolerance toward crime in the early 1990s. Even so, Mayor Ballard has it right. Long term, sustainable recovery of cities as livable environments within the metropolitan economy requires both good public schools and an environment in which parents feel that they and their children are safe.

There is a cautionary note however. While the Mayor's office is on the right track in wanting to solve the endemic problems that have so weakened core cities such as Indianapolis, he has yet to take a position on a proposed commuter tax that would be levied against employees who live in suburban counties and work in the city. This would make the suburbs more attractive for employers who are presently located in the city. Further, it would make the suburbs more competitive to businesses that choose the Indianapolis area for relocation. Trying to attract and keep middle income households, while repelling business makes little sense.

- Commuter tax on Suburbanites Working in Indianapolis? | Newgeography.com

[venture]

What are you going to tax? I'm not aware of any Oklahoma municipality that charges an income tax - Indianapolis, more specifically Marion County, does. They would have to redo the tax setup here to here local communities or counties do their own income tax if you want to have a system similar to what is being proposed by Indy.

Growing up from that area (the Great Lakes) most states and their communities charge separate income taxes, except for unincorporated townships. I was subject to two situations. One I lived in city limits of one community and worked in the city limits of another and the other I lived in a township while working in the other city. I paid income taxes in both situations and in both cases the money went to the city where the income was earned.

So what you are going to have happen, if it ever does here, is that commuters from Edmond, Moore, Del City, etc...will end up having their income taxes diverted to Oklahoma City (where they would work in my example) and the revenue gathered by the home community will decrease. Since the cities would collect an income tax, theoretically the state would lower their income tax rate substantially. Indiana is something like 3.7% or something for a state income tax, but Marion County charges a 1.6% income tax that is applied on top of that. So how are cities going to make that up? Property taxes are going to jump. Many years ago when I had one of my first homes in the city in my example above, a 1000 sq ft house on a very small lot had property taxes of around $2500 a year. That is a good mount more than what I pay now on a house double the size and on a lot twice as big.

So think. Does that really seem like a good idea? Is this really the road we want to go down?

If you want to get people into the major city of the region improve quality of life and make it attractive to live in. If you are going to change the tax structure to make it happen, you are just asking for a nightmare to start unfolding that very well could cause a massive exodus to the surrounding communities or huge budget issues.

If cities are that worried about people living out of the limits, then toll the main roadways that are being maintained by the "anchor" city and get reimbursed that way.

[Plutonic Panda]

Well, my line of thinking was having a separate new tax going to the parent city of CMSA. No revenue would be taken from cities like Edmond or Norman, just a tax that is going to the major "parent" city that most will travel to. This would go to things like road funding, police and fire, etc.

Toll roads are fine, but I don't think every road should be tolled. Also, I'm thinking of a smaller tax, not a big one.

[venture]

Well, my line of thinking was having a separate new tax going to the parent city of CMSA. No revenue would be taken from cities like Edmond or Norman, just a tax that is going to the major "parent" city that most will travel to. This would go to things like road funding, police and fire, etc.

Toll roads are fine, but I don't think every road should be tolled. Also, I'm thinking of a smaller tax, not a big one.

We would need to see the number of commuters that travel into OKC each day to really get an idea of the impact. OKC charging a local income tax, which likely will be followed by everyone else doing the same, is going to also cause companies to have to adjust their withholdings and process where the person is living while working for them. We want to be business friendly and this could cause a few issues with that.

[catch22]

If we had a per mile flat rate for road usage, you'd have a commuter tax. This wanting to live 40 miles from work would pay more than those who want to live next door.

[venture]

If we had a per mile flat rate for road usage, you'd have a commuter tax. This wanting to live 40 miles from work would pay more than those who want to live next door.

That's probably the only logical way to do it. Record where you live and where you work and the business reports the number of days during the year your were on site and a mileage estimate is printed out. You then pay a tax based on the mileage used during the year. The system would be setup to benefit the tax payer in utilizing the shortest route to calculate it by, even though a few days the person may need to detour due to traffic reasons or some other issue.

So let's say the tax amount we would be looking at is 1% for a local income tax on commuters...the city I use to live in was 2.25% for local income taxes, but not everything is having to be paid for here - since we don't have local income taxes. So average Joe making $47815 in Norman has a 25 mile commute one way to work. That would work out to 13,000 miles per day if he worked 5 days every week with no vacation or time off. If we estimate something like $478.15 would be collected under a flat city income tax for commuters, it would break out to charging him roughly 3.6 cents per mile of his commute in. In the grand scheme this is still cheaper than a person with a PikePass traveling the entire length of the Kilpatrick - which is around 8.4 cents per mile.

However, the minute OKC would try to do something like this...everyone will.

[Plutonic Panda]

We would need to see the number of commuters that travel into OKC each day to really get an idea of the impact. OKC charging a local income tax, which likely will be followed by everyone else doing the same, is going to also cause companies to have to adjust their withholdings and process where the person is living while working for them. We want to be business friendly and this could cause a few issues with that.

I guess. Just seems it'd be better to have a more dedicated source of funding for OKC to spend on things that could improve the city for the people that commute to and from the city as well as the tourist that visit. If OKC is going to support more people from the suburbs, shouldn't it get its fair share somehow, aside from sales tax.

[catch22]

Well it would be more complicated, as not everyone originates from home or has multiple jobs. I have two jobs, both at the same location. So on days I drive to work once, work two jobs, then come home. I would be taxed twice for one trip.

[venture]

I guess. Just seems it'd be better to have a more dedicated source of funding for OKC to spend on things that could improve the city for the people that commute to and from the city as well as the tourist that visit. If OKC is going to support more people from the suburbs, shouldn't it get its fair share somehow, aside from sales tax.

What about people that commute to Norman? It is the 3rd largest city in the state and does have people commute to it? Not to mention other communities that also see a good number of commuters. I just don't see how this would work without causing a bunch of issues with the tax code and how the state income taxes is distributed to the cities.

Does OKC really have any costs associated with upkeep of interstates? I have roughly 1 mile of my commute on a city street. Should I be taxed on my full commute or just the one mile?

[venture]

Well it would be more complicated, as not everyone originates from home or has multiple jobs. I have two jobs, both at the same location. So on days I drive to work once, work two jobs, then come home. I would be taxed twice for one trip.

Yeah, I just don't see how a commuter tax is going to work here with no local income taxes. Indianapolis is trying to do this in a situation where there are local income taxes.

[Plutonic Panda]

What about people that commute to Norman? It is the 3rd largest city in the state and does have people commute to it? Not to mention other communities that also see a good number of commuters. I just don't see how this would work without causing a bunch of issues with the tax code and how the state income taxes is distributed to the cities.

Does OKC really have any costs associated with upkeep of interstates? I have roughly 1 mile of my commute on a city street. Should I be taxed on my full commute or just the one mile?

Well, maybe they could take a poll of where you have been. If you are commuting directly from Norman to Edmond, you are still contributing to more traffic in OKC and traffic is a factor of the quality of life index, so you are impacting the city in a way.

I guess it would be more complicated than helpful. Something should be done to address it. A mileage tax is a good idea, I am still against tolling all highways.

[Plutonic Panda]

Anyhow, I'm calling it night for now. I just think OKC should have a new source of revenue from people that use its streets, services, and transit. Sure they have sales tax, but there is no guarantee everyone will be paying it by using tax exemption or simply not buying anything.

A mileage tax would be good, but dedicated for transportation projects and nothing else. A commuter tax or sprawl tax would keep the city competitive and have to the right to do so since the nearby commuter cities are directly benefiting from the bigger cities. I mean seriously, would Edmond, Norman, Yukon, MWC, etc. be where they are today without OKC? I know Guthrie used to be the capitol and Stillwater has OSU, but I know a ton of people that commute from OKC to Stillwater and vice versa. Norman has OU, but like Stillwater, only due to having the populations in the state to support those colleges.

[bchris02]

I disagree with this in its entirety. I think people should have the right to live as close or as far from their jobs as they choose and shouldn't be taxed for doing so. Taxes are already way too high and doing this would kill the middle class. Increase inner city desirability by increasing quality of life and amenities in the inner city, not by punishing people who choose the suburbs.

Toll roads like the Kilpatrick Turnpike are the only acceptable solution to do anything like this.

[Midtowner]

Speed traffic cameras at all interstate entrances to the city would be big revenue generators and would disproportionately hit commuters in the pocket book.

[bchris02]

Don't commuters already pay enough in higher fuel prices? Why shouldn't the free market decide where people live?

[Richard at Remax]

They pay tax when they purchase any items in the host city. no reason to add another tax. no one here wants to admit it but the vast majority (even though its declining) of people supporting downtown and vicinity live in suburbs. you add a tax to them coming and they will stop coming then businesses will suffer.

as for toll roads Im all for it if they are operated like the Kilpatrick

[foodiefan]

. . . I mean seriously, would Edmond, Norman, Yukon, MWC, etc. be where they are today without OKC? . . . .

Can't let this pass without asking where would the OKC metro (not to mention outlying communities that have a significant population of base employees) be without MWC/Tinker. I am fully aware they are separate entities, but it were it not foresight of the founders of MWC, Tinker might well be somewhere else. Do you not remember the base closure deliberations? There were literally hundreds of "factors" that went into making those decisions. . .perhaps a mileage tax on everyone to get to the workplace on base might have tilted the scaled to south of the Red River. Think about that one. As much as we have "boomed" since MAPS. . .what do you think the impact would be if those people. . and $. . were elsewhere.

[Zuplar]

So how would that work for someone like me that lives in 'rural' OKC and works in Mustang? I get the trend is people living in suburbs, but OKC has suburban areas of it's own. I think this is trickier for a city the size of OKC as it is one of the larger land size cities in the US.

[venture]

So how would that work for someone like me that lives in 'rural' OKC and works in Mustang? I get the trend is people living in suburbs, but OKC has suburban areas of it's own. I think this is trickier for a city the size of OKC as it is one of the larger land size cities in the US.

Great example. This is what I was getting at. As soon as OKC would do something, then every surrounding community would have to as well. By the example I whipped up just for discussion sake (I don't agree with doing it) and to give PluPlan something to think about, people that live in OKC city limits and work in OKC city limits don't pay.

I guess something that is completely left out of all of this is - what would OKC be hoping to get out of it? PluPlan mentioned help with essentially infrastructure. The interstate system doesn't come out of the city budget, as far as I'm aware, so our tax dollars are already going to it regardless of where we live.

[CaptDave]

The only idea similar to this I've heard of working is in London. There is some sort of fee for entering the city center in an automobile - I apologize, I cannot remember all the details. That doesn't make sense for OKC because there isn't much preventing a business from leaving downtown to the suburbs if something like that was implemented.

Another issue with PluPan's concept are the suburban areas of OKC. I have an Edmond mailing address, but actually live within the OKC city limits. Good goal to fund future infrastructure needs, the method is not something I think would work.

[Zuplar]

The only idea similar to this I've heard of working is in London. There is some sort of fee for entering the city center in an automobile - I apologize, I cannot remember all the details. That doesn't make sense for OKC because there isn't much preventing a business from leaving downtown to the suburbs if something like that was implemented.

Another issue with PluPan's concept are the suburban areas of OKC. I have an Edmond mailing address, but actually live within the OKC city limits. Good goal to fund future infrastructure needs, the method is not something I think would work.

I think they've actually talked about the London fee on TopGear before now that you mention it. I think they basically call it a congestion fee though. But essentially you can drive in London, but certain areas where there can be high congestion you have to pay a fee to drive.

[CaptDave]

Good to have another Top Gear fan (UK version only though!!) here! That is the basic concept of the London fee as I recall.

[Midtowner]

Great example. This is what I was getting at. As soon as OKC would do something, then every surrounding community would have to as well. By the example I whipped up just for discussion sake (I don't agree with doing it) and to give PluPlan something to think about, people that live in OKC city limits and work in OKC city limits don't pay.

I guess something that is completely left out of all of this is - what would OKC be hoping to get out of it? PluPlan mentioned help with essentially infrastructure. The interstate system doesn't come out of the city budget, as far as I'm aware, so our tax dollars are already going to it regardless of where we live.

The state legislature could limit this ability to cities with a population of 300,000 or more. That'd get around it being a special law. Of course, good luck on getting the state legislature to support any sort of tax until the Dems win control back.

[betts]

I'm not in favor of this. It's unwieldy at best. Make the core such a great place to live, shop, dine and recreate that people either choose to live in the city or they come here for fun. That will bring enough tax dollars in.

By the way, anyone who hasn't shopped on Auto Alley is missing some outstanding stores.

[tomokc]

PluPan - I'm trying to understand what you don't like. Your poll question mentions a "commuter tax," but your first post mentions "people living in the suburbs." Is it suburbanites you don't like? People who moved from the CBD to the burbs? Commuters? People who drive too much? What?

Some people propose taxes as a way of punishing certain behaviors (cigarette taxes for instance), and that sounds like what you're suggesting.

What's your beef?