For years, we at Via Meadia have been sounding the alarm about ominous fiscal headwinds facing America’s state and local governments—particularly, the multi-trillion dollar pension deficit accumulated over decades of dishonest accounting and bipartisan political fecklessness. But today, we thought we’d highlight one trend that could potentially buy politicians more time to deal with the looming crisis: Driverless cars. Governing magazine reports on some of the ways that this new technology could help shore up shore up strained state and local budgets:
Its new report, Autonomous Vehicles & Municipal Bonds, [Morgan Stanley] puts the net positive impact on municipal budgets in excess of half a trillion dollars. That number takes into account more efficient roadway use and a dramatic reduction in parking garages and parking spaces. With parking facilities no longer needed, those properties can be turned into higher-level development, which would provide municipalities with a boost in property taxes. Offsetting those gains, Morgan Stanley foresees losses of roughly $1.3 billion from such revenue sources as fuel taxes, license fees, parking fees, speeding tickets and personal property taxes.
It’s not just parking garages: Fleets of self-driving cars could also reduce strain on expensive public transportation systems. And as Governing reports, autonomous vehicles are expected to reduce the number of accidents and traffic stops, freeing up more resources for urban police and fire departments.
None of this means that policymakers can or should become complacent about the pension problem, which is an order of magnitude greater than the potential savings from self-driving cars. But it is a reminder that if and when state and local governments get back on sound fiscal footing, it won’t just be thanks to union-busting and benefit-cutting, but also to investment and innovation in the private sector.