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Special Fee for All Car Drivers: A Useful Instrument for Financing the German Transport Infrastructure?

Gernot Sieg, Bernhard Wieland, Günter Knieps, Thomas Puls, Klaus J. Beckmann, Tobias Bernecker, Torsten Böger
ifo Institut, München, 2014

ifo Schnelldienst, 2014, 67, Nr. 11, 03-28

In April this year Torsten Albig, Minister-President of Schleswig-Holstein, made the surprise proposal of a special fee on all car drivers to finance the necessary infrastructure repairs. Would this proposed fee be a useful financial tool? According to Gernot Sieg, University of Münster, this special levy and a special "Repair Germany" fund would only strengthen the incentives that have led to the under-funding problem. A vignette, on the other hand, coupled with an expansion of VIFG (Transport Infrastructure Financing Company) to a Federal Highway Fund, would resolve the problem of the worsening conditions of federal highways. In addition, the vignette would teach motorists that the use of the highways must be paid for. This is an important step in the right direction: If we can end the "all-for-free mentality", the next steps towards load- and distance-based tolls will be easier to achieve politically. For Bernhard Wieland, Technical University of Dresden, the advantage of Albig's proposal is the comparatively rapid implementation; all commissions and experts agree that immediate action is necessary. An extension of the truck toll or the introduction of even rudimentary spatially and temporally differentiated car tolls would require much more time. For Günter Knieps, University of Freiburg, the time is ripe for an "intelligent" car toll. A time-limited vignette solution would not address the congestion problem. For an active congestion management of the highway infrastructure, it is necessary to include all vehicles, trucks and cars, and at the same time to impose road fees that vary according to regions and the time of day depending on traffic loads. In the past, charging load-based road fees failed because of the technical limitations. In recent years, however, significant technical progress in electronic transport telematics has been made, which have also been implemented worldwide in various countries, so that workload-dependent congestion fees are now superior to all conceivable alternatives for the financing of the road infrastructure. Thomas Puls, Cologne Institute of Economic Research, emphasises that to improve the transport infrastructure much more is needed than new sources of funding, namely a change in political priorities – a higher priority must be assigned to transport policies. Firstly, the position of the Minister of Transport must be strengthened. Creating long-term funding instruments and a reform of the division of responsibilities between federal and state governments would also be helpful. For Klaus J. Beckmann, KJBeckmann: ProStadt – Municipal Research, Consulting, Facilitation and Communication, Berlin, introducing a car toll is indispensable. If the goal is a linkage of user- and tax-based financing, it will be necessary to expand the truck tolls to the Increased tonnage categories, also to included regional highways, but also to introduce a car toll. For Tobias Bernecker, Heilbronn University of Applied Sciences, the Introduction of a car toll announced by the Federal Ministry of Transport is logical if it is part of a development path that would lead from the principle of tax-financed transport infrastructure towards user-financed sectoral infrastructure financing circuits. Torsten Boeger, VIFG – Transport Infrastructure Funding Company, stresses the benefits of user financing. It offers the possibility of establishing closed financing circuits and thus of establishing a connection between the income and the service-provision side. Such a user-financed system would enable an efficient funding, and an optimal pricing and would lead to an efficient management.

JEL Classification: L920, R400

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ifo Institut, München, 2014