By Emily Iles
They might want to call it the “drive-away” tax.
The nice name for the tax passed by the Mission City Council is the benign “transportation utility fee”, or TUF, but it’s known colloquially as the “driveway tax”.
Let’s call it what it is, though: it’s another tax levied on property owners. The driveway tax is a charge tacked on to property tax bills.
The Kansas Reporter has estimates of the shiny new tax burden that aren’t tiny, especially for businesses:
Under the plan passed Wednesday, individual homeowners in Mission will pay no more than $72 a year because their addresses contribute least to wear and tear to streets in the 2.5 square mile community. Small offices and retail shops, with more visitors, might pay between $700 and $3,600, depending on their building size and business volume. Higher-traffic businesses, such as fast-food stores with drive-through lanes, might pay as much as $12,000 a year and higher-traffic shopping sites, such as the community’s Target store could pay as much as nearly $65,000.
Now, I’m going to put aside my gut reaction for a second and mention one thing that this tax gets right. The driveway tax will be paid for by people using the roads to improve those roads.
But everything else about this tax is as noxious as it gets.
The logic behind this fee is that a road is essentially a utility, and, like gas or electric, users pay based on how much they use a road. So properties, businesses for example, that generate more traffic are using the utility of roads more, and should pay more. But this is a terrible way to pay for roads, for a couple of reasons:
1.) Because it’s a fee, not a tax increase, voters did not get to approve it – but it’s a tax increase in effect. There are plenty of user fees for roads, like tolls, or other ways to fund the transportation project Mission has in mind. The city could have asked for a tax increase that would roll back at the end of the project. But instead they instituted a charge that will continue indefinitely, even though the project is finite. It looks like a thinly veiled way to increase property taxes without the approval of voters.
2.) It’s not even a good measure of use. The fee is calculated by estimating the frequency and type of vehicle activity at a given address. They will not actually be “counting” vehicles, thank God, but making an assumption of use. For businesses, it means the more customers they bring, the more they’re likely to pay. They’ll pay for individuals who use the roads to get to their shop. Individual homeowners, it seems, will pay for driving back home. Drive time doesn’t look like it’s part of the measurement, just frequency. It also doesn’t look like there’s a way to challenge a fee. Property owners can only challenge the rate category they’re in.
3.) It discourages the very activity we want to increase. Dan Murray, State Director of Kansas NFIB, said this fee will “…tax the very businesses bringing customers, who generate sales tax dollars, into the community.”
If you’re outside of Mission, KS, don’t undo your necktie just yet. Local tax ideas are spreading like wildfire these days, and while this is a new one for Kansas, and perhaps the entire Midwest, you won’t even get a vote on it if your city council decides to charge your business thousands of dollars. Beware, too, of de facto taxes. The driveway tax is just one example of a fee that avoids the voter approval process for tax increases, but has the same effect.
I wouldn’t be surprised to see especially new businesses shuffling right over the city limits to avoid thousands in fees on account of the ‘drive away’ tax. Excuse me, ‘driveway tax’. Ahem, TUF.
Any way you phrase it; this one’s a dud.