Monthly Archives: June 2007

Utah Supreme Court Decision #

The Utah Supreme Court just ruled in a unanimous (4-0) decision that (contrary to the opinion of the Attorney General) HB 174 could not stand alone, separate and apart from HB 148. Read the full decision (pdf).

Before reading the decision to those assembled, the presiding Justice prefaced his comments, including the following (as best I could keep up):

The decision is not the opinion of the court, the reasoning is still being fleshed out. The decision we’ve reached is unanimous.

For those of you familiar with the process of the court, we rarely do this in hours—we usually do it over a period of weeks.

The full written opinion may not be available yet for several weeks.

Some highlights of the decision include:

We are required by law to presume that the ballot title prepared by the legislative staff is an impartial summary. We are not allowed to change the wording of the ballot title unless we are clearly convinced by the sponsors who challenge the wording that the ballot title as proposed is either “patently false” or “biased”. … The fact that all the world is confused by the ballot title, alone, is also not enough. To modify the title language, we must find by the heightened standard of proof that the proposed title is clearly false or clearly biased. Summary of Decision, Case No. 20070417-SC, page 3

… [W]e find nothing in the work of the Office of Legislative Research and General Counsel suggesting any intentional or even inadvertent bias. Further, the ballot title prepared by Ms. Taylor and her legal staff appears to accurately and correctly reflect the precise nature and content of the ballot referendum submitted to the Lt. Governor. Ibid., page 4

Ms. Taylor is correct that it is not within her power as Legislative General Counsel to interpret the ultimate consequence of the referendum vote on HB 148 on HB 174. It would have been inappropriate for the proposed ballot title to speculate on the resolution of that legal question. Ibid., page 4

[W]e have concluded that HB 174, “Educational Voucher Amendments” is dependent upon HB 148, “Educational Vouchers” for meaning. It is the clearly expressed intent of the legislature that the provisions of HB 174 were to modify the provisions of HB 148. Should HB 148 be rejected by the voters under the referendum before us, HB 174 would be without legal meaning. Specifically, we conclude that HB 174 was not intended by the Legislature to stand alone as an independent act creating an educational voucher program, and therefore it does not. Although HB 174 is not subject to referendum by the voters, it is subject to the consequences of the referendum on HB 148.

Furthermore, now having the benefit of that legal conclusion regarding the dependence of HB 174 on HB 148, we are able to resolve any doubts that might have lingered about the accuracy and completeness of the proposed ballot title. If the voters choose to reject HB 148, HB 174 will not create an additional voucher program. If the voters choose to accept HB 148, the amendments of HB 174 will automatically be applied. However, automatic application of the HB 174 provisions in that would not require changes in the proposed ballot title.

Ibid., pp 4-5

Finally, please note that while this statement reflects the unanimous decision of the court, it does not substitute for the official opinion of the court yet to be issued in writing.
Ibid., page 5

And finally, my favorite line from the statement:

We fear a small forest somewhere has given its all for this case. Ibid., pp 1-2

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An Alternative to Increasing the Gas Tax #

A handful of discussions have popped up recently in response to the Utah Taxpayers Association’s suggestion that the gas tax be raised significantly. It seems to me UTA and those responding to their proposal are coming from different premises, and thus arriving at different conclusions.

One of UTA’s reasons for supporting a significant gas tax increase (offset by a sales tax cut) is to implement a form of congestion pricing. As a consumer, I choose not to travel during rush hour (as best I can), not because I think to myself, “Hey, I spend more on gas when I’m stopped on the freeway!” but because my time is important to me. My fossil fuel use is similar whether I drive during rush hour or on an empty road. (In part because my gauge’s “significance” is defined by the 1/4 of a tank. [1]) Since I don’t log miles/traveled and manually calculate mpg, it’s all the same to me. Time in traffic is the ultimate congestion pricing. [2]

UTA recognizes it’s regressive, and suggests a refundable income tax credit. It’s probably even more regressive than they realize, because the gas tax will also be passed on to consumers when they buy shop for necessities. Ugh. I thought the whole flat-tax movement was an attempt to make taxes easier, not harder. (I’m noticed their implicit acknowledgment of the “ed funding shell game” [3] in moving general fund money in and out of the education fund.)

UTA skips over the “inconvenient truth” <ahem> of local air quality, energy conservation, foreign oil dependence, conservation, or whatever other moniker you want to attach to the discussion. Those are good reasons for a gas tax too…

What conservationists miss is that gasoline consumption is fairly price-inelastic over the short term, and rising gas prices haven’t put a crimp in sales of gas-guzzling vehicles. [4] Gasoline is a dependent variable. It correlates to the type of car we drive, and how far from work we live, and a handful of other things. It’s largely inelastic because we see it as a “necessity.”

If conservation (rather than congestion pricing) were our goal, we might consider a different solution: address the cause, not the dependency, by assessing a percentage surcharge on combustion engine vehicles. Increase the charge for less efficient vehicles. Require the cost of the surcharge to be displayed next to the EPA estimates for every car sold. Inform the consumer, and make it immediately relevant in the purchase decision. (It would be less effective to disclose the charge along with sales tax and dealer fees when the purchase is nearly complete.)

For example (and these are just examples–I’ll leave the actual number crunching to someone else), we might set a charge of 1% for vehicles rated at less than 30 mpg (city), an additional 1% for vehicles rated below 20 mpg, and another 1% for vehicles below 15 mpg. The suburban at 12 mpg would have a total 3% charge. The efficient Honda Civic might have none.

The legislature can still do an income or sales tax offset, if they like.

It might not affect congestion and driving behavior, but it would address gasoline consumption, and could leave us with cleaner air.

  1. 2003 Ford Focus. And our three kids fit comfortable in the back seat. [^]
  2. Thus, I conclude a gas tax would have a minimal effect on congestion. Yes, I realize I’m arguing from a single data point, and succumbing to the false consensus effect. (I’m reasonable, others are reasonable, ergo others think as I do.) [^]
  3. This could probably be a post of its own. While it’s technically correct to say every income tax dollar goes to education, the reality is that the legislature can move money wherever they need by providing more or less of a subsidy to higher ed from the general fund, and shifting the difference between public and higher ed. It’s sometimes a point of contention between public and higher ed. There are those in education circles who insist all income tax dollars are theirs by right, but the legislature does have a responsibility to other programs too. You just won’t be able to get any of ’em to admit they shifted around education dollars to do it. [^]
  4. See also the San Francisco Chronicle article. I’m sensationalizing a little bit here. The long-term sales trend is down, but there was a significant up spike in the first quarter. [^]
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