Reason Foundation blog endorses Land Value Capture and Market-Based Transportation Funding
Sam Staley writes:
I’ve thought for a while that “value capture”–taxing the increase in property value due to public investment in infrastructure–should be used more widely as an alternative to using income taxes, sales taxes, or other general forms of taxation to fund transportation infrastructure. Property taxes achieve this to some degree, but real value capture would ensure only the properties that directly benefit from the spending actually pay for it; it would minimize redistribution of income to subsidize spending on the project. So, in theory at least, value capture retains the basic principles of a user fee, although a more appropriate term would be beneficiary fee.
I also believe that value capture, as an alternative to tapping into general taxes, has the benefit of creating more transparency and accountability in selecting and managing public projects. If spending has tangible benefits, then private property owners and investors would step up to the plate and voluntarily underwrite at least a portion of the costs.
We recently completed a report for Brookings on Value Capture: Access for Value: Financing Transportation Through Land Value Capture, as well as another report for the Minnesota State Legislature: Value Capture for Transportation Finance.