Transportation funding requires long-term solution

This entry was posted on Thursday, April 7th, 2011 at 9:08 am and is filed under Chamber News, Public Policy, Transportation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

This op-ed was published in the Deseret News, Sunday, April 3, 2011.
By Lane Beattie

Governors only have one vote, but it’s a big one. The power to veto legislation passed through two legislative bodies and 104 elected officials is the pinnacle of executive power. Gov. Herbert showed his executive power this week by vetoing S.B. 229, a bill that would have set aside hundreds of millions of dollars collected from sales tax to meet Utah’s urgent transportation needs. This disagreement between two branches of government provides a window of opportunity to solve long-term funding issues for our transportation infrastructure. Nothing is more important to our economic vitality.

As vetoes go, this one was bold. The bill passed 60-10 in the House and 24-4 in the Senate. Many business leaders, including those at the Salt Lake Chamber, supported the bill. The most populous areas of the state are projected to grow by 1.5 times by 2040. If more transit lines or highways are not constructed, time stuck in congestion will be six times longer than current delays. If we want to have the strongest economy in the nation we must maintain a superb transportation infrastructure.

I want to be clear. The Salt Lake Chamber has supported each of the six sales tax earmarks for transportation that have become law over the past 15 years. We have done so because earmarks were the only feasible way to meet Utah’s transportation funding challenges. Funding the rebuild of I-15 and I-80 in Salt Lake County, the construction of Legacy Parkway and I-15 in Davis County, the rebuild of I-15 in Utah County and projects throughout the state were an economic imperative. We can’t have congested roads and keep business costs low and the result is reduced quality of life now and for our children and grandchildren.

Over the years earmarks have piled up—this would have been the seventh. At full implementation in 2017, S.B. 229, when combined with the other transportation sales tax set asides, would automatically divert nearly one in every four dollars of sales taxes collected to transportation projects. The governor has pointed out that such a large earmark would limit state budget flexibility during a downturn and put at risk other vital state priorities. His veto eliminates the earmark but the money is still in the state budget.  All transportation stakeholders should use this opportunity to allocate the money and additional funds in an efficient, transparent and fair manner to meet our state’s growing needs.

Economists agree the most efficient and fair tax policy connects the tax to the consumer in the form of user fees. Motor fuel is metered at the pump so transportation funding can be tied to usage through the gas tax. It’s efficient because the government service is tied directly to consumption. It’s fair because those who use the service pay for it. It’s easy to administer and it’s transparent because you see the tax every time you fill up your tank.

Utah’s gas tax has not been increased since 1996. As a fixed per-gallon tax, it has not kept pace with inflation and should be indexed. With more fuel-efficient cars, the tax has been spread among increasingly greater miles traveled per gallon. As a consequence, state decision makers have augmented transportation funding with general sales tax revenues to meet our needs.

The governor’s veto has provided an opportunity for state decision makers to take a thorough look at the best way to meet Utah’s significant and growing transportation needs. Doing so will require both sales and motor fuel taxes to meet our needs. A motor fuel tax, combined with a single transportation earmark of auto-related sales, is a great place to start.

Lane Beattie is the president and CEO of the Utah’s largest statewide business association, the Salt Lake Chamber. He served as president of the Utah Senate from 1994 to 2000.

Leave a Reply