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One of the paying stations. Photo. Wikimedia

Money from congestion tax end up elsewhere

Chronicles/analysis | 2010-12-17
When the congestion tax was made permanent in Stockholm in 2007 a precondition was that the revenue from the tax would come back to Stockholm. This has not always been the case.


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In the local referendum about the tax, which was held at the same day as the national election in 2006, 51.3% voted yes. During the debate before the referendum everyone agreed that if the tax was to be made permanent, the revenue from it should benefit Stockholm. One of the main reasons was to maintain the legitimacy of the tax in the eyes of the local population. Furthermore, the tax was seen not only as a way to decrease traffic in the inner city, but also to get funds for more roads and rails in the region, something that is very much needed.

By practical and legal reasons it was still decided to design the system by making it a state tax. The main reason was that according to Swedish law a municipality cannot collect taxes from the inhabitants in another city and thus people who are not listed in Stockholm would escape the tax if it was formed as a local tax. A large proportion of those who travel in and out of Stockholm on a daily basis are living in the surrounding municipalities. It could also not be designed as a fee since a fee needs to be directly connected to a certain benefit and getting the right to enter or exit the city was not a sufficient benefit to meet the legal requirement on a ‘fee’

So, a state tax it was. Both the national- and local governments assured the voters that the money would come back to Stockholm through the state budget. The tax itself is not controversial anymore, most former opponents have changed their minds since the traffic in the inner city has decreased and the overall burden of taxation has also decreased due to other decisions by the national government.

The tax gives a net surplus on SEK 350 million per year (about 35 million euro). This will increase in the near future when most of the technical investments are written off. According to the government, SEK 673 million has not yet been paid back to the region.

Catharina Elmsäter-Svärd, Minister for Infrastructure. Photo: Sandra Bakirjazid

The Minister for Infrastructure Catharina Elmsäter-Svärd says to the daily newspaper Dagens Nyheter that the money will be paid out to Stockholm when it is needed for the big by pass road Förbifart Stockholm that will be built for traffic going between the south and the north parts of the Stockholm region. The by pass will be built between 2012 and 2020.

Even if the money will eventually come back to Stockholm the discussion is likely to go on about the lack of local control over the money that is paid to the system.
 


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