Zug,19.11.2014

Should cantonal vehicle tax be raised by 50% for 20 years

It was announced last week that the Public Economy Committee of the cantonal parliament had decided that the tax fee for vehicles registered in Zug should be increased by 50% for a period of 20 years to help raise CHF 300 million for the construction of the CHF 890 million City Tunnel. Not surprisingly, there has been quite a reaction to the decision.
 
Thomas Ulrich, the president of the Zug section of the TCS national Swiss motoring organisation, said that this was a very unusual way of raising funds and it would be a "bitter pill for locals to swallow". The TCS is generally against the raising of vehicle tax to finance projects such as this.
 
Furthermore, as the tunnel did not form part of the "agglomeration programme" of the Swiss State, finance from this source would be limited. However, it was thought as much as CHF 235 million might be forthcoming from a special national highways fund.
 
It is only to be expected that a large proportion of the CHF 890 million is to be sourced from the canton itself but it should not be forgotten that 40% of jobs in the canton are taken up by people who live beyond the cantonal border and commute here every day, and not just by train. Would this mean that some local motorists who might never use the tunnel be subsidising it for those who might use it regularly without having to make a contribution?  Should not those who benefit directly from the tunnel be asked to pay, for example by the introduction of a toll perhaps? This is not so simple as it would mean an amendment to the Swiss constitution.
 
How have other countries solved such problems? Motorists in Austria are expected to pay an additional toll when driving through the Tauern and Arlberg Tunnels. Could not today's technology be used to charge vehicles for passing through Zug's City Tunnel in a similar way? Again, the TCS is against this as it thinks its leads to people on reduced income being restricted in where they can drive and the organisation is totally against the introduction of an obligatory toll sticker.
 
Fortunately, as the City Tunnel (if built) is not due to open until 2032, there is plenty of time to work out a solution.