It’s been a “good news” kind of week for observers of our nation’s security apparatus. At least that’s how the government is spinning it.
But there’s plenty of bad news for travelers, too. More on that in a minute.
On Wednesday, the Department of Homeland Security announced it had scrapped the color-coded terrorism alerts and was moving to a more “robust” two-tiered system called the National Terrorism Advisory System (NTAS).
The feds also issued a helpful guide (PDF) that explains NTAS. It’s an interesting read. It promises to only issue alerts “when credible information is available” and to include “a clear statement that there is an imminent threat or elevated threat.”
The implication, of course, is that under the previous system, there was sometimes no imminent threat and the warnings were vague. The guide also contains DHS Secretary Janet Napolitano’s favorite saying, which gives a lot of travelers the creeps: the Orwellian, “If you see something, say something.” [continue]
Just when you thought they couldn’t possibly add any more fees to rentals, here comes another: A freshman state senator in Florida is trying to slap a $2 tax on cars to support Tri-Rail, South Florida’s commuter train.
No one believes Tri-Rail is an unworthy cause. But should tourists pay for a rail system they’re unlikely to use?
The Tax Foundation, non-partisan research organization that has monitored tax policy, thinks not.
A rental car tax is a particularly inappropriate revenue source for commuter rail. Because Tri-Rail is designed to move commuters from suburban areas to business districts, with peak service at rush hour, it not very useful to the leisure travelers who dominate South Florida’s car rental market. It is clear that car renters are being targeted not because they are beneficiaries of Tri-Rail, but because they are a tax source that lacks representation in the Florida legislature.
Here’s the bill in its entirety. The relevant language allows the state to authorize the county
… to impose a county surcharge upon the lease or rental of a motor vehicle licensed for hire; requiring that the county surcharge may be used solely to fund the transportation needs of the county as determined by the county commission; requiring the county commission to place the county surcharge on the ballot of the next general election for a vote by the electors; providing an effective date.
The car rental industry is up in arms. The American Car Rental Association, a trade group, released the following statement:
Every rental car customer — regardless of whether they are a Floridian or a tourist — currently pays $2 a day in rental car tax.
Each rental car bill is increased by an average of 13.23% due to taxes (rental car tax, airport access tax, consolidated facility fees, security fees, etc.). If rented at an airport, the average amount added to every bill grows to 24.13%.
What other consumer service is taxed at such a high rate?
Government user fee increases. It is true that many fees such as motor vehicle registration, title fees, and even speeding tickets are being increased to assist with the budget deficit. But there is a major difference between those fees and the rental car tax.
Those fees pay for a service provided by government, such as the receipt of a vehicle registration or title. Increased fees for speeding or running red lights are levied to protect public safety and deter future violations.
The rental car tax is completely unrelated to a service provided for public benefit or any other state-related purpose. It is simply a tax on a small group of consumers.
This tax increase is bad public policy because it:
Forces one industry’s consumers to pay for a service from which they do not benefit. An increased car rental tax would place an excessive burden on a limited number of customers from a single industry. Why is this small group of consumers being asked to fund the needs created by everyone?
Penalizes Floridians who rent cars. This tax will not be borne only by tourists! Florida residents and businesses rent cars for a variety of reasons, such as when their car is being repaired, for weekend leisure trips or for business trips. Last year, 74% of just one rental car company’s customers were Florida residents.
Negatively impact Florida’s economy. Tourism is a key driver Florida’s economy. Yet studies show that increasing rental car taxes lowers the number of cars rented. According to Amy Baker, Director of the Florida Legislature’s Office of Economic and Demographic Research, “the national recession is largely responsible for the state’s tourism downturn…the two places you’d see it the most are in sales tax collected and in rental car surcharges”.
Visit Florida is partially funded by a portion of the $2 a day rental car tax. However, it was recently reported that these collections were down 14% in the final quarter of 2008. The recession has greatly affected tourist industries such as hotels, theme parks, convention centers, restaurants…and rental car companies. Increasing this tax will further diminish the state’s ability to attract tourists and businesses to our state.
Rental car companies are a portion of this industry and they have had major employee layoffs that began late last year. Anything that lowers the number of cars rented will only push more people into our unemployment lines.
I don’t think anyone is saying Tri-Rail is an unworthy cause. But should tourists have to pay for a service they’re unlikely to use?
There are two solutions: First, you could avoid renting a car in South Florida. Or you can and ask him to reconsider his position on this proposed new tax.