Virginia's New "Voluntary Tax" on Its "Bad" Drivers, Part 3:
The backlash continues
21 Jul 2007 in Regulatory Economics, Regulatory Policy
We've posted here and here on Virginia's new "voluntary tax" on so-called abusive drivers, the funds from which are earmarked for highway improvements. The law continues to provoke controversy, we think in part because defenders of law persist in applying economic logic that even people untrained in economics understand is faulty.
In at least one Virginia city, Front Royal, the city council will be voting on a ordinance directing its city police force not to issue the relevant citations and advising court clerks not to report violations to the state Department of Motor Vehicles, which implements the law. (We have not reviewed Front Royal's proposed ordinance.)
One of the six reasons given for repeal has economic content, focusing on the cognitive dissonance between the two stated public policy purposes behind the law: (1) raising revenue for transportation projects and (2) improving traffic safety.
As we pointed out in our original post, the law cannot achieve both. If Virginia drivers fundamentally alter their behavior so as to refrain from committing sanctioned traffic violations, the law generates no revenue. If Virginia drivers do not alter their driving, the law cannot improve traffic safety. Petitioners implicitly believe that a law is unfair or inappropriate if it tries to accomplish objectives that they intuitively understand are incompatible. Moreover, the public distrusts politicians who make claims that violate their intuition about the way the world works.
The law continues to be supported (Richmond Times-Dispatch, Virginian-Pilot) by Virginia's Democrat governor and Republican House and Senate leaders. They clearly believe that Virginia drivers will not significantly alter their behavior, and their revenue projections will be realized. However, Mothers Against Drunk Driving supports the law in the belief that Virgina drivers' behavior will change and traffic safety thus will improve. The Mid-Atlantic section of the American Automobile Association also supports the law to generate revenue, not improve traffic safety. Like Virginia legislators and the governor, AAA preferred this law because it avoided an increase in the gas tax.
Advocates of the law continue to justify it based on faulty economic reasoning, touting both revenue generation and traffic safety benefits. For example, House Speaker William J. Howell defends the law saying that its purpose of the law is to improve highway safety despite the law's negligible capacity for deterrence:
We are here to underscore the real, bi-partisan support that exists for improving Virginia’s transportation system and for making our roads and highways safer. Deterring dangerous and abusive driving has always been and remains the primary focus of the abuser fee provisions of the new transportation law. Safe drivers with only minor traffic infractions or occasional speeding tickets have nothing to fear from the abuser fee legislation.The Fauquier Times-Democrat quotes Governor Tim Kaine having argued in favor of the bill on public safety grounds:
Both Houses agree on abuser fees. The dangerous behavior of unsafe drivers threatens the safety of other drivers and causes accidents that create congestion. Those drivers should be financially accountable for their actions.According to the Richmond Times-Dispatch, Kaine defends the bill because "[b]eing for driver safety is a good thing." The safety theme is the justification provided by the Virginia DMV:
Abusive driver fees have been under consideration by the General Assembly for three years. The goal of the fee is to promote traffic safety and other states who [sic] have adopted similar programs have seen improvements in overall driver safety.The supporting evidence for this claim is not provided.
But the Times-Democrat editorial favoring the law quotes Kaine arguing for the bill because it would raise revenue for transportation projects, not reform driver behavior:
Both houses agree that abusive drivers should pay stiffer fines to be used for transportation needs.In some cases, advocates of the law who acknowledge that its purpose is to raise revenue and not improve safety have relied on biased portrayals of revenue-raising alternatives they dislike. For example, John B. Townsend II, AAA Mid-Atlantic’s Manager of Public and Government Affairs, says that an equivalent gas tax increase "would cost every Virginia driver an average of at least $200 annually." In 2005, there were 5,362,140 licensed drivers in Virginia. If Townsend's average cost figure is correct, additional revenue from an increase in the gas tax would exceed $1 billion -- not the $65-120 million that advocates of the new civil remedial fine law expect to collect. A gas tax sufficient to generate $100 million would cost drivers an average of $18 per year. (That figure is an overestimate; a nontrivial share of gas taxes are paid by out of state drivers.
Townsend implicitly acknowledges that what made the law appealing is that it targeted a small subpopulation engaged in inappropriate conduct rather than the general population. "The new fees avoided that tax increase by only targeting the most unsafe drivers on our roadways." House Delegate David Albo, the co-author of the legislation, has offered a similar defense: "We could charge everybody an extra 100 bucks a year or we could charge abusive drivers, the people who abuse the roads." This comes close to claiming that drivers who commit the enumerated traffic violations are the reason why Virginia officials seek more money for transportation projects.
POSTSCRIPT
The news accounts give limited attention to explaining why Virginia officials chose to collect use administrative fines on driver licenses rather than simply increase the penalties for the traffic violations that trigger these fines. Two reasons are hinted at in the news accounts, and a third pops up after minimal Internet sleuthing.
First, raising statutory penalties does not ensure that they will be paid, as judges retain the discretion to reduce or eliminate them. This is item #2 in the reasons for repeal given in the online petition, and if revenue is the objective the political branches of government do not want the judiciary controlling how much they collect.
Second, fines collected from traffic violations are earmarked for other purposes. This argument is weak because money is fungible; general fund appropriations to earmarked programs can reduced dollar for dollar so that increased fine revenue is allocated in fact, if not in law, to road projects.
Third, and most persuasive, is that if the Virginia DMV levies the fines, they will be paid in full. Failure to pay results in the suspension or revocation of one's driver license, and the prospect of exponentially increasing costs in the event of a future citation for driving on a suspended or revoked license. Full disclosure: Neutral Source managing editor Richard Belzer knows this firsthand: his license was suspended without notice in December 2006 because Fairfax County, Virginia, lost his timely payment of a fine for an expired safety inspection sticker on a 3-year old SUV. The County's error was ultimately corrected, but not at County expense. Had the current law been in place, the $46 initial violation could have risen to over $1,000.
This may be the unstated reason why the new law has generated such opposition. Contrary to their historic reputation, departments of motor vehicles are heartless engines of efficiency. In modern America, people are willing to pay extraordinary sums not to lose a valid driver's license, which means the DMV has unrivaled leverage.
PETITION TO REPEAL VIRGINIA'S "CIVIL REMEDIAL FEE" LAW
To: Elected Officials in the Commonwealth of Virginia
To: Elected Officials in the Commonwealth of Virginia
We, the citizens of Virginia, are opposed to the outrageous and unjust traffic fines imposed as "civil remedial fees" in House Bill 3202 for the following reasons:
- The fines inflict a punishment on drivers that is disproportionate to the degree of the offense they committed.
- The fines are mandatory, and judges are given no discretion in sentencing.
- The language of the bill states that the purpose is to "generate revenue" and hence the fines have nothing to do with traffic safety.
- The bill's sponsor, Del. David Albo (R- 42nd District) is a partner in a law firm that specializes in traffic court cases and stands to benefit personally from this legislation. This type of conflict of interest should not be tolerated.
- The fines in the bill apply ONLY to Virginia residents, hence unfairly creating different penalties for the same traffic offense based solely on residency.
- In order to generate additional revenue, points for driving offenses remain on the offender's license for up to 11 years. This will unnecessarily increase the offender's insurance rates for a time frame that is incongruent with the degree of the offense.
Sincerely,
The Undersigned
From Barry Sullivan on 27 October 2007, 10:15
This only applies to Virginia drivers. How is this equal protection under the law?