Chicago Mayor Lori Lightfoot has floated the idea of introducing a congestion tax for vehicles traveling into the downtown area as a way to reduce gridlock while raising revenue to help plug a $838 million budget deficit.
Adam Schuster, director of budget and tax research at the Illinois Policy Institute, argues that while there is nothing intrinsically wrong with a congestion charge, “the devil is in the details.”
“The truth is there is no right way to increase taxes on an overtaxed population,” said Schuster. “My most fundamental objection is that Illinoisans and Chicago residents already pay one of the highest combined state and local tax burdens and that’s using tax collections as a percentage of personal income. So by the most comprehensive apples-to-apples comparison we are already paying a very high tax burden.”
Schuster said that any new tax that is not done in a revenue neutral way to offset costs from somewhere else is going to have “negative economic effects.”
“Chicago’s economy is very reliant on tourism,” said Schuster. “It’s very reliant on consumers coming in from the suburbs and shopping, whether that’s people coming here for recreation or for work. If we make it more expensive for people to enter and drive into the city it’s going to reduce some of that behavior.”
MarySue Barrett, an urban planning expert at the Metropolitan Planning Council, which favors the introduction of a congestion charge, agrees that a new charge should not be introduced merely as a means to help balance the budget.
“The mayor of course is dealing with a major fiscal challenge driven by pensions and declining population, etc.,” said Barrett. “Those two issues should not be confused with each other … Congestion pricing fees are best thought of as ways to address gridlock and to give people more choices – not to close a budget gap.”
But Barret also notes that if gridlocked traffic discourages people from wanting to live and work in the city then that imposes a cost on all Chicagoans.
“Our region is very fortunate to have a robust transit network but it does not serve everywhere,” said Barrett. “We can learn from the experiences of cities like Stockholm and London who have had congestion pricing for some time – but each city’s traffic dilemmas have some unique aspects to them.”
If Chicago does introduce a congestion charge, Barret said that it’s important to ensure the city uses available technology to come up with a system that provides benefits for all without hurting those with low incomes.
“We clearly can’t afford to stifle commerce or economic investment. As with anything, there’s a tipping point,” said Barrett. “The idea is to reduce congestion by reducing cars, period. If we have a robust bus rapid transit system, if we have more dedicated bike lanes, if it’s possible to actually walk places … we have to think about designing for people not designing for cars.”