Panel: Self-driving cars will cost cities

Self-driving cars and other emerging technologies are going to cut into municipal budgets nationwide, a panel of futurists at Arizona State University says.

Imagine this brave new world:

– Autonomous cars that never speed, never run red lights— and owners who never get popped for drunken driving or pay a dime for traffic tickets.

– Robotic vehicles that deliver people and goods anywhere — and choke off income taxes from displaced taxi drivers and delivery-truck drivers.

The financial impact of driverless cars represents just one of many ways emerging technologies will disrupt local governments, according to the authors of a report published by the Brookings Institution, a non-profit public-policy organization based in Washington, D.C.

Technology already is affecting social behavior, the authors wrote.

Social media has enabled quick-forming communities of like-minded residents to lobby local leaders in a nearly unprecedented manner. The concept of municipal-level, flash-mob political movements hardly existed before Twitter.

Similarly, governments will have opportunities to brand their municipalities as centers for immigrants and the creative class who will hold jobs that survive — and benefit — from emerging technologies.

"In order to be a relevant and critical player in the future, local governments will need to rethink their design, strategy, operations and processes in fundamental ways," the researchers wrote.

"We assert that changes on the not-too-distant horizon will require local governments to be agile, nimble and dynamic," they wrote.

Local governments have until about 2035 to figure it out.

The 27-page report was written by two ASU professors and four students. The professors: Kevin Desouza, an associate dean in the College of Public Service and Community Solutions, and David Swindell, director of the Center for Urban Innovation.

The students: Kendra Smith, a postdoctoral student in public service and community solutions; Alison Sutherland, a doctoral student in liberal arts and sciences; Kena Fedorschak, a graduate student in business; and Carolina Coronel, a recent graduate in public service and community solutions.

Driverless cars illustrate potentially sweeping change, said Desouza, who was reached in Australia. "That was one of the easier points to make, because it's one of those points that everybody can relate to," he said.

Google, Tesla, Mercedes and other manufacturers are testing driverless vehicles and are getting close to making them available to consumers.

"It turns out that automated vehicle technology — unlike humans — abides by the law. And that's bad news for local government revenues," the researchers wrote. "Deep revenue sources acquired from driving-related violations, such as speeding tickets and DUIs, will decrease sharply."

Others differ with their vision of the future.

Ken Strobeck, executive director of the League of Arizona Cities and Towns, believes the futurists' concerns are misplaced.

"I'm assuming that these statements are coming from people that don't have any idea how city budgets operate, because revenue from traffic tickets and DUIs is not a significant source of revenue," he said.

Traffic tickets aren't money generators for most municipalities, he said. Police expenses, court costs and related expenditures typically offset or exceed the revenue that tickets bring in. Traffic laws are enforced to promote safety, he said.

"I don't think anybody is worried about driverless cars impacting their municipal revenue — maybe impacting their guard rails and curbs," Strobeck said.

In Phoenix, bad-driver-funded revenue generates slightly more than 1 percent of the city's budget, said Tracy Reber, director of the city's Department of Budget and Research.

Phoenix collected $9.6 million in fines from most moving violations in fiscal 2014. Fines from DUIs brought in an additional $1.2 million for a combined $10.8 million.

Traffic-ticket revenue represented approximately 1.1 percent of the city's entire general fund of $1.03 billion in 2014, a percentage that has remained fairly steady since at least 2011.

Circumstances are similar in Mesa.

Mesa collected $4.2 million in traffic-ticket revenue, which accounted for roughly 1.3 percent of the city's $326.5 million general fund in fiscal 2014, said spokesman Steven Wright.

A selection of other metro Phoenix cities could not immediately identify the amount of funding received from traffic-ticket fines, often because the revenue is lumped in with revenue derived from fines for littering, jaywalking and other non-driving offenses.

In Phoenix, a potential loss of $10 million to $12 million a year would be noticeable, Reber said.

"You're talking about millions of dollars, so yeah, that's paying for some police officers' salaries, a few of them, at least. It would be something that we would have to make up in some other way," she said.

But Reber doesn't share the futurists' vision of American roads in 2035. "I'm kind of doubtful about that self-driving car, myself," she said.

The potential loss of revenue from traffic tickets is just part of the picture, Desouza said.

If driverless cars are synced to parking meters, parking-ticket revenue similarly would dwindle.

Other technology-charged changes to the transportation system would choke other existing revenue sources, according to the researchers.

Increased use of public transportation, more peer-to-peer ride services and wider acceptance of car-sharing programs also will trim revenue sources from registrations, emissions testing and similar fees, Desouza said.

Car sharing, which allows people to rent cars for a couple of hours at a time, already is well-developed in large urban centers like New York and Washington. Car-sharing companies such as Car2Go, Zipcar, Enterprise CarShare and Hertz 24/7 appeal to consumers who want to use cars but not own them.

Desouza said that after the report was published in May, he fielded about 100 e-mails from city managers and budget directors from across the U.S. and Canada. None had previously considered the financial implications of driverless cars.

He was pleased with the outcome.

"Our goal was to evoke a reaction," he said.

Bad-driver revenues

Fees from traffic tickets have made up about 1 percent of Phoenix's general-fund revenues for the past several years. The breakdown:

Fiscal 2015

Projected total budget: $1.1 billion.

Projected traffic-ticket fees: $9.7 million.

Projected portion of the budget: 0.9 percent.

2014

Total budget: $1 billion.

Traffic-ticket fees: $10.8 million.

Portion of budget: 1.1 percent.

2013

Total budget: $981 million.

Traffic-ticket fees: $11.2 million.

Portion of budget: 1.1 percent.

2012

Total budget: $948 million.

Traffic-ticket fees: $12.4 million.

Portion of budget: 1.3 percent.

2011

Total budget: $958 million.

Traffic-ticket fees: $12.3 million.

Portion of budget: 1.3 percent.

Figures are rounded.

Source: Phoenix Department of Budget and Research