Myth busting: DC Home Rule prohibits a “commuter tax,” but that’s not why we don’t have congestion pricing

Why aren't there tolls on the Potomac River bridges? Why doesn't DC have a congestion charge to drive downtown, like London does or New York has considered? Is it because the Home Rule Act prohibits a “commuter tax?”

It's a common argument, but isn't the reason.

The Home Rule Act, the 1973 law which established DC's mayor and council and gave them power over DC laws, does have a list of things DC can't do (Title VI, section 602). For instance, DC can't tax federal property. It can't allow buildings to exceed the federal height limit. It can't run budget deficits.

It does not, however, have the words “commuter tax” anywhere. One provision of the “can't do” list says DC may not:

(5) impose any tax on the whole or any portion of the personal income, either directly or at the source thereof, of any individual not a resident of the District (the terms “individual” and “resident” to be understood for the purposes of this paragraph as they are defined in section 4 of title I of the District of Columbia Income and Franchise Tax Act of 1947[, approved July 16, 1947 (61 Stat. 332; D.C. Official Code § 47-1801.04)]);

Many states tax personal income of people who live out of state and work in the state. For instance, if you live in New Jersey and work in New York, you pay New York State income tax and New Jersey income tax, but you can deduct the New York tax from your New Jersey taxes.

This is commonly referred to as a “commuter tax.” However, it's not a tax on commuting as such. It's a tax on non-resident income.

Some other states have “reciprocity,” like New Jersey and Pennsylvania, where two states mutually agree they won't tax the out-of-state income of residents of the other state. Through this provision, Congress essentially imposed this on DC (and Maryland and Virginia do give reciprocity to DC residents).

This provision does not prevent DC from imposing a charge for drivers. That would not be a tax on income.

The provision WAS an issue with the paid family leave bill, for instance. One possible way to pay for it was as a tax on the salary or wages paid to workers in DC, but that's not allowed for out-of-state residents because it would be “a tax on the whole or any portion of the personal income … of any individual not a resident of the District.”

There are other reasons there isn't congestion pricing

Some cities, like London, have what's called “congestion pricing.” Driving downtown is free in cities without congestion pricing, and demand far exceeds supply, leading to traffic. Economists say the best solution is to put a price on using this scarce good. Charge a toll for driving in the crowded area, and devote the money to funding other methods of getting downtown, like transit.

New York recently considered a congestion charge (for the second time) to fund the MTA, but the state legislature chose instead to just tax ride-hailing companies, leaving solo drivers still getting to Manhattan for free if they come in along certain roads or bridges. (Some New York bridges and tunnels do have tolls, making for a somewhat nonsensical tolling scheme.)

DC couldn't toll most Potomac River bridges directly. The Teddy Roosevelt (I-66) and 14th Street (I-395) bridges are federal interstates, and with a few exceptions, states (and DC) can't put tolls on existing interstate lanes. The Trump and Obama administrations floated proposals to end that ban, but they would require the money to go for road maintenance or construction.

However, DC could legally set up a “cordon charge” around an area such as downtown. This is how London's pricing works. DC's 2013 Sustainable DC plan and 2014 MoveDC transportation plan recommend studying a cordon, and the draft 2018 Sustainable DC update reiterates that recommendation.

Could it happen politically?

Just because a law wouldn't violate Home Rule doesn't mean DC can pass it. Congress can block a DC law by passing a resolution in both houses of Congress, subject to Presidential signature or veto. If DC instituted congestion pricing, without getting the support of the Maryland and Virginia delegations, there's a pretty good chance Congress would overturn it before you can blink, especially now.

However, maybe a deal could be worked out. Maybe DC pledges some of the money to cover some Virginia and Maryland payments to Metro, since many Metro riders in those states travel across the border. Or maybe there is some other way to make a cross-border or downtown cordon charge beneficial to all, and therefore politically palatable.

Transportation experts also say an ideal congestion charge would probably include Virginia job centers which are adjacent to downtown DC, like Rosslyn and Crystal City. A cross-border congestion charge would avoid having a congestion charge push jobs to urban places right outside it. However, getting the Virginia legislature to allow a cordon is an even bigger lift than getting Congress to not overturn a DC charge.

Of course, a congestion charge or tolls would also be unpopular with most voters who drive. It's not clear DC elected officials would want to vote for such a policy either. However, there hasn't been a serious effort to build support for it. Depending on what it means for voters, including how the money is used, perhaps the right policy could get through.

The regional Transportation Planning Board and Brookings Institution studied public support for congestion pricing and other pricing methods in a 2013 report, which found about 50% support for a cordon, one of three scenarios they asked about.

Do you think DC and/or Virginia should have congestion pricing? Where should it be? What do you think it might take to get political support?