In a humdrum report, the City’s Progressive Revenue Stabilization Workgroup proposed nine possible ways to generate more revenue to help fill a projected $220 million budget shortfall. The report rehashed many taxes the City has already considered, including a congestion tax that Mayor Jenny Durkan shelved in 2020. 

While the City will not move forward with the congestion tax proposal right now, Seattle can expect the conversation to resurface again, as it has repeatedly for the last two decades. The issue can pit the affordability crisis against the climate crisis, dividing the left on whether to support a tax that lowers emissions but also potentially punishes low-income drivers, who would be forced to pay up or contend with insufficient transit options. 

The choice isn’t necessarily a binary one, though. Through targeted action, the City might be able to mitigate harms to low-income drivers while still discouraging road traffic and its attendant pollution. But even if the City finds a compromise between those positions, at the end of the day, it's still a regressive tax in the sense that it hits normal people who own cars rather than wealth-hoarders and corporations. 

What Is a Congestion Tax?

A congestion tax, also known as congestion pricing, would impose new tolls on busy roads to reduce traffic, which accounts for 66% of the city’s carbon emissions, and use that money to pay for public transit. In other jurisdictions, those charges range from $1 to $20 at certain times of day, with various caps, discounts, and exemptions. 

According to the Seattle Department of Transportation’s (SDOT) 2019 study on congestion pricing, the City could implement this tax in a few ways. 

The City could opt for cordon pricing, which would tax travel to and from a specific zone, usually downtown, as practiced in Stockholm. Similar to cordon pricing, the City could copy London’s area pricing model to tax travel to, from, and within a specific zone. The City could also target specific types of vehicles, such as ride-hail cars, commercial vehicles, and–if you really want to tax the rich–Lambos. Finally, the SDOT report suggested taxing drivers based on miles traveled in what is known as a road usage charge, which the State piloted in 2019. 

Congestion Pricing in Practice

Proponents of the tax praise its power to lower CO2 emissions in the face of climate catastrophe and point to evidence of it working as intended in other jurisdictions. Out of the five cities SDOT studied–Stockholm, London, Singapore, Milan, and Gothenburg–all saw a drop in CO2 emissions, a reduction of cars on the road, and more revenue. 

Out of the five cities, only Gothenburg implemented congestion charges alone, providing a better controlled variable compared to the other places. Gothenburg, a slightly smaller city than Seattle, saw a 2.5% drop in CO2 emissions, a 12% reduction in car trips in the tolled area, and $90 million in annual revenue. The other cities saw more dramatic results by combining congestion pricing with low-emission zones, area licensing schemes, and other traffic-combating tools. 

The tax may also help decrease traffic deaths, though it is unclear to what degree. After London instituted its congestion law and lowered speed limits in that zone, pedestrian death and serious injury decreased by 25%. Transport for London, a city agency, attributed the drop to roads with fewer and slower cars. 

Despite success elsewhere, the policy has not caught on in the US. Many cities have toyed with the idea, including Seattle, which started studying the tolling scheme two decades ago. In 2018, former Mayor Jenny Durkan proposed a congestion tax that could have reduced CO2 emissions by 9% to 20%. She abandoned the idea in the fall of 2020 over the “dual crises of COVID-19 and systemic racism,” according to a statement from her office. 

One of These Things Is Not Like the Other

Though the City added the tax to its list of “progressive” taxes to help fill the budget hole, congestion pricing is not “progressive,” nor would it help fill the budget hole. 

For one, rules set by Seattle’s Transportation Benefit District require the revenue to fund only transportation projects–not the general fund the City needs to fill. Even if the City could move the money to address the gap, it is not clear how much revenue the tolls would raise after the cost of enforcement. In 2017, London spent a third of the program’s revenue on enforcing the tolls.

Secondly, the City would need voter approval to implement such a system. That could be a tall order, since the auto industry would fight tooth and nail against a likely divided progressive front. After that, the tax could take more than 10 years to implement, which wouldn’t exactly help to fill a $220 million budget hole projected for 2025. 

Thirdly, and perhaps most controversially, tolls are a regressive tax. This is especially true in comparison to the City’s progressive payroll tax, which targets Seattle’s largest corporations on a sliding scale. 

The Infamous Upside-Down Tax Structure

As a reminder, a “progressive” tax does not just mean a tax you like or a tax that you believe would produce progressive outcomes, such as lowering emissions. A “progressive” tax refers to a tax rate that increases as the taxable amount increases, whereas a “regressive tax” refers to a flat rate. Since rich people have more money than poor people, poor people end up paying a higher percentage of their income in taxes than rich people do under regressive tax regimes, whereas progressive taxes balance the load. 

Congestion pricing affects everyone who drives in a given area, looping in rich people along with poor people forced to drive into town for work after the housing crisis pushed them out of the city. City analysis acknowledges the possible hit to low-income people, but no one knows the degree to which it would fuck them over. 

The City could set tolls for certain times of day or means-test the regressive tax in order to mitigate financial harm for the poorest Seattleites. Though, in cities with exemptions, drivers must register with the local governments, giving poor people another bureaucratic hoop to jump through.

There’s no official proposal on the table at the moment, so it is unclear how or if Seattle would set thresholds for exemptions or discounts. The City’s usual upper threshold for low-income programs, such as for housing and utility discounts, sits at 80% of the Area Median Income (AMI), which works out to around $70,000 per year for a family of one. That wouldn’t be taxing “the rich” so much as it would be nickel-and-diming teachers, social workers, nurses, and other workers who are realistically next in line for displacement.

Even if the City manages to set up an airtight safety net for not-so-rich drivers, the tax is still more regressive than other streams the City could more easily implement. That’s probably why the Progressive Revenue Stabilization Workgroup decided to proceed with proposals for a citywide capital gains tax, a CEO pay ratio tax, or an increase to the JumpStart payroll expense tax. 

On the Other Hand

At the same time, urbanists argue that car dependency also hurts the working class. It's expensive to own a car with or without a small toll through downtown, and it is straight up not fun in my opinion. But it's easy to tell people not to drive when you have access and time to travel by transit. Let’s be real, if you have to get to downtown Seattle, you’ll probably choose the 30-minute drive over the hour-long bus trip until local governments make transit the best choice. 

Still, the long-term effect of the congestion tax–paying for better transit, combating climate change, and improving pedestrian safety–could benefit communities of color and low-income workers who feel disproportionate harm from those issues. 

Ultimately, the City will have to decide if the benefits to these communities and to greater Seattle outweigh the potential damage–that is, if the City ever actually stops just talking about congestion tax.