London Congestion Charge Research Papers Examples
The London congestion charge is fee that is charged on publicly operated vehicles that use the charge zone within specified time period. The program of congestion charge ensures that the city is not congested with motor vehicles and also controls traffic (John, 2007). This is a program that is introduced to control the volume of carbon emissions to the atmosphere by public vehicles.
Sources of Revenue
In order to make the program effective, the government would need to incur costs. This means there is need to source for funds .Government can get funds from:
User charge: These are the revenues that are levied upon those who use the congestion charge zone within the specified times e.g. between 7.00a.m to 8.00 pm. The funds can be used in the implementation process to make the program work by providing education and training to the public (OECD, 2010). The funds can also be used in the introduction of more digital gadgets to help the program succeed.
License tax: The other source of revenue would be license tax. This is the revenue received from vehicles which have been licensed to use the congestion zone. These would include charges levied on broken down or vehicles that are being used on the road though not roadworthy. The income will be important to the program in that it will assist in the implementation process.
Fiscal monopoly: In this case public vehicles will have no option but to use the congestion zone and that means they will have to pay for the fiscal monopoly fee (OECD, 2010). The policy is monopolized in that it is controlled by only one body that is the government.
Franchise fee: Is another source of revenue for the government that is very useful in the implementation of the congestion charge program. Examples of franchise fee are the charges incurred by a vehicle who is disposing off his vehicle. All these are collected by the government and used in the development of roads
Revenue Estimating Techniques
The implementation costs for this program are approximated to be around 190 million dollars. Another approximated cost of about 140 million dollars that would be used in the expansion of the congestion zone. The U.S embassy also will be pleading for the exemption of its over 200 employees who would wish to use the congestion zone (Harry & Chang-Hee, 2009). Due to the desire to maintain international relations, this has to be done. This means loss of revenue from the U.S embassy employees. This is approximated to be around 8.5 million dollars annually. In a typical year the government can make a total of 268 million dollars from the congestion charge and all these are to be used in the improvement of transport and roads within the country. At the end of it all as much as costs are incurred there is still income that the government gets that would be further used in the implementation and further development of roads
The Public Response
The public would give several criticisms on the program as they think the program has not been technologically tested and might fail in the end. They argued that the charges would be so unfair especially to the low income earning vehicle owners (NCHRP, 2011). The high income earning vehicle owners would be very comfortable paying the charge and so crossing the congestion charge zone would not be a problem.
The low income earning vehicle owner would restrict their vehicles from accessing the congestion zones and this would mean low business for them.
The other argument by the public was the concern people would be forced off the roads into the buses and the train system. This would create a crisis. The public is concerned about the congestion that would be created in the buses and the train system as this can be a trigger to crime in a country.
The public also feels putting a congestion charge on the charging zones would mean charging the public for using public property. According to the public they pay taxes to make the roads and again they pay to use the roads. This is a double taxation levied among them.
The public also argues that since the area is charged when one passes through it, many people would be discouraged to use the charge zone (NCHRP, 2011). This means no much business will be taking place and there will be a drop in the economic activities in the country.
The major purpose of congestion charge zone is to control traffic, the number of vehicles in town and also to reduce carbon emissions in the city. The other ways a country could do this would be introduction of road diets and bike lanes which would help to reduce traffic in the central business districts. The other way of controlling vehicle in the central business district would be putting up a bus stage for the public vehicle where everyone in the CBD who wants to use the public vehicles would go to find them for transport (Georgina, 2004). This would mean every vehicle that gets into the CBD pays a fee because they already have a bus stop in an area in CBD outskirts.
2. Charging for Firefighting
This is where the government charges for firefighting or rather puts a levy on people who leave near or in forest and the fire prone areas. It is put into place to cater for them and consider their safety in case there is a fire outbreak. This also looked at by the government on the basis that fighting wild fires is very expensive and taxpayers have to pay for this in the taxes.
Sources of Revenue
The sources of revenue for firefighting still remain a mystery of whether it should be paid by the tax payer or by the people who live in the forests or near the forests. The state needs to come up with a method of collecting revenue that are to be put at stand still to fight fire during the fire outbreak seasons. If the tax payer will have to pay for the money to be used in the firefighting program then incentives need to be put in place that will ensure less property is damaged in case there is a fire outbreak (Georgina, 2004).
Making the residents of these areas to pay for firefighting would be a bit too expensive on them. This is on the government to design a revenue collection strategy and from which category of people since when a fire breaks it is not an individual’s problem but rather a whole country’s problem.
The revenue estimation will depend on the tax collected by the state in a particular year. It solely depends on the current tax policies that are available. Firefighting only means that money will be spent and not much income will be coming from the collections. The cost to be incurred in the fighting of wild fires depends on the extent of the fire and area covered. The cost to be incurred is not easy to approximate since different fire extent varies from one outbreak to another.
The general public and critics have complaints to be raised. They argue that levying the tax on the general public would mean that some citizens will gain on it while others do not gain on the tax collected. This to them is proving to be quite unfair. The other part of the public complaints that fire outbreak is everybody’s problem and in that case all citizens need to contribute to the fight against fire. According to the levying the whole tax against them alone will mean only a small portion of citizens carry the burden of a whole nation.
An alternating to charging for firefighting would be an inclusion of the charge on the tax paid by citizens and organizations. In that case, they would not feel the pinch of contributing to the firefighting program. It will also ensure that all citizens contribute to it without having to feel the pinch of contributing to it.
After a thorough evaluation of the two programs, I recommend the congestion charge zones program. This is because, the public will always complain and say how much a program is bound to fail because of several factors that they think should have been put in place. The program incurs cost during its implementation period but on the other hand it is a source of revenue for the nation (OECD, 2010). The nation stands to gain because there is some money coming in.
Another reason is that traffic within the CBD is controlled and this eases the activities in the city. When traffic is reduced and there is no congestion, it comes with several advantages such as speed of cars, fast movement and reduction in criminal activities. It comes with several advantages.
The other benefit of congestion charge is that emissions of carbon products to the air are much reduced. CBD is an area which is very busy and with the emissions it makes it a very chaotic and unhealthy place to be and work in. With the emissions not around it becomes a cool place to be in.
The reason I chose the congestion charge over the charging of firefighting program is because with the congestion charge we have some revenue coming in which if we had we could still use to perform firefighting activities (OECD, 2010). Evaluating the finance status of a program I would support that which has something to offer e.g. income in return and substantial income for that matter.
John L.M .(2007). Fiscal Administration. (9thEdn). Boston: Wadswoth.
OECD. (2010). Cities and Climate Change. New York. New York university press.
HarryW.R, & Chang-Hee C.B. (2009). Road Congestion Pricing in Europe: Implications for the United States: California: California Press.
NCHRP report 686. (2011). Road Pricing: Public Perception and Program Development. Washington DC. National Assembly of Sciences.
Georgina S. (2004). Road Pricing: Theory and evidence.(Vol.9). London: London Publishers.