French Public Transport Taxes and Economic Dynamics: a Query to Transport Organization Tasks for Which Local Authorities Are Responsible



French Public Transport Taxes and Economic Dynamics: a Query to Transport Organization Tasks for Which Local Authorities Are Responsible

Authors

CAUBEL, Central East Territorial Directorate - CEREMA, ALIAGA, Central East Territorial Directorate - CEREMA

Description

This paper examines the suitability of potential beneficiaries of the french transportation tax "versement transport" implementation at regional, departmental or UTA level, while identifying its limitations in view of firms economic dynamics.

Abstract

More than ever, French public transport financing is the core issue of intense negotiation within urban transport authorities (UTA) and local authorities. In light of the widening gap between revenue and expenditure, these authorities seek ways to maintain economic and financial stability for the adequate functioning of public transport networks. The French financing tool, called “versement transport” (transportation tax), is a means of increasing revenue.

The “versement transport” (TT) is a tax paid by firms employing more than nine employees (regardless of the nature of the activity or the legal form of the firm) in a territory where such payment is established, in this case within the Urban Transport Perimeter (UTP), which corresponds to the UTAs jurisdiction.

Because of difficulties in public transport financing, TT revenue is understandably coveted by local authorities, but leads to inequalities due to territorial disparities.

However, the transportation tax has reached its limits. Transport authorities and local authorities have exploited this public transport financial leverage to its maximum. They could seek to raise new revenues by introducing subtle changes to the current law (while being consistent with the development of urban public transport networks) or by extending UTPs. However, this is pointless if few or no taxable firms are within the target territory. The payroll of firms with more than nine employees is linked to territorial dynamics rather than to urban and non-urban boundaries, institutional boundaries or UTP. However, this payroll is the basis for calculating the total amount of transportation tax owed. Thus, it is important to analyse the relationship between a territory’s economy and transportation tax.

The location of firms - and therefore their payroll - highlights territorial disparities and diversified economic dynamics. There are many features that make transportation tax a specific tool to each UTA or a tool that could potentially combine different levels of transport authorities (Regions, Departments, UTA). Thus, should we continue a vain quest for additional revenue through transport tax? Or, should we examine coordination between different local authorities in order to articulate regional economic dynamics and mobility needs?

This paper examines the suitability of potential beneficiaries of transportation tax implementation at regional, departmental or UTA level, while identifying its limitations in view of firms economic dynamics.

We analysed firms locations and payroll (and its evolution over several years) at different territorial levels (Regions, Departments or Municipalities). This payroll indicator, which is the basis for calculating a firm’s transportation tax contribution, is available in the Automated Social Data Declarations (ADSD), provided by the National Statistics Institute (INSEE). We combined this information with data from the yearly “urban public transport” database that provides information about the evolution of UTP and transportation tax.

Three levels of analysis were made:
- Analysis of payroll dynamics, whilst identifying the share of payrolls located within or outside UTP. This analysis was made at a regional and departmental level in order to highlight territorial disparities. The analysis shows territorial leeway to obtain transportation tax beyond current UTA perimeters and reflects the diversity of payrolls according to different territorial scales. The analysis highlights the potential transportation funding that the payroll represents according to the jurisdictional area of each TA;
- Analysis of the evolution of urban transport schemes and associated indicators in terms of transportation tax, in line with changes in the forms of territorial governance of UTA. This study was made according to conurbation sizes. It highlights how the transportation financing tool has begun to run out of steam;
- Analysis of the dynamics of firms and their payroll at a municipal scale. Beyond the phenomena of the concentration or decrease in economic activities around conurbations, we highlight the gradual disintegration of urban and non-urban areas and how this impacts the transportation tax (an initially urban-oriented tax). This tool cannot follow the logic for which it was implemented without taking into account changes in firms’ locations (rural, periurban or suburban). Changes in firms’ locations are mainly linked to territorial development and more specifically to the development of roads and non-collective transportation.

Without questioning the relevance of the existing tool for financing public transport, the results of the overall analysis open the debate on the governance and forms of cooperation between the different TA in line with territorial mobility needs.

Publisher

Association for European Transport