This past month, Rep. Mike Schultz, House Committee Transportation Chair, gave an exclusive recap of the top transportation bills of the 2017 legislative session to the Salt Lake Chamber’s Utah Transportation Coalition. Rep. Schultz discussed how the Utah Transportation Coalition played a central role in these issues and gave a behind the scenes look into the legislative process behind these policies.
Looking to the Future
In 2016, Utah was the fastest growing state in the nation and projections show this growth is not expected to stop anytime soon. Utah’s business community works closely with the governor and legislators to prevent problems and tackle tough issues. This combination of careful planning and tenacious problem-solving keeps Utah ahead of other states facing the same challenges.
And that’s exactly what S.B. 174, Public Transit and Transportation Governance Amendments is designed to do. The bill builds on the successful collaboration behind Utah’s Unified Transportation Plan with a new Transportation Governance and Funding Task Force.
“We have got to start looking at funding for other modes and how to better align land use decisions and transportation investments,” Rep. Schultz told the group.
The Task Force will evaluate best practices regarding multimodal transportation to support mobility, safety, economic growth and quality of life. The Task Force will analyze and make recommendations on a wide variety of topics, including:
- Governance, coordination, oversight and operational structures of transportation.
- Funding needs, current state and local funding sources, future projections and alternative transportation revenue mechanisms.
- The interrelationship of growth, land use, capital development and transportation.
The 16-member Task Force will be comprised of the following appointments:
- Two members of the Senate appointed by the Senate President, one being co-chair
- One member appointed by the Senate President, representing the private sector
- Two members of the House appointed by the House Speaker, with one as co-chair
- One member appointed by the House Speaker, representing the private sector
- Three members appointed by the Governor, one representing the private sector
- One member designated by the Utah Transportation Commission, one by the UTA Board, and one by the Utah League of Cities and Towns
- Two members designated by the Utah Association of Counties, with one representing a rural county
- One member designated by the Mountainland Association of Governments
- One member who is the Chair of the Wasatch Front Regional Council
This Task Force provides an excellent opportunity to build on the success Utah has already had in collaboratively planning and investing in Utah’s multimodal transportation system.
Updating Utah’s Gas Tax Formula
The Utah Transportation Coalition made its mark on transportation policy with the passage of H.B. 362-Transportation Infrastructure Funding Amendments in 2015. However, shortly after passage of that bill, gas prices plummeted, impacting the indexing component of the legislation.
“We had originally projected that the growth component would begin in 2019,” said Michael Parker, Chamber Vice President of Public Policy. “Instead, we were looking at 2026 or beyond. That completely undermined our efforts to stop the impact of inflation.”
S.B. 276, carried by Rep. Schultz, updated the underlying formula behind Utah’s gas tax to match the current economic conditions and the intent of the 2015 H.B. 362.
“The Utah Transportation Coalition was critical to the successful passage of S.B. 276 ,” said Schultz. “In the final days of the session, Abby and Michael were able to speak with almost every member of the House of Representatives and work with our leadership team to get this passed.”
A critical component of the bill sought to provide a budgetary mechanism to alleviate pressure on the general fund from transportation earmarks.
“In 1997, 95 percent of our road funding came from the gas tax,” said Rep. Schultz. “Now, that portion is down to 50 percent.”
As such, the bill also begins the process of reducing overall transportation-related sales tax earmarks by 35 percent of the new fuel tax revenues to ensure users bear the primary responsibility for funding Utah’s infrastructure.
“As this is all unplanned revenue for the state, it will not impact any long-term planning in the Unified Transportation Plan,” said Abby Osborne, executive director of the Coalition and Chamber Vice President of Government Relations. “This bill brings us back in alignment with our projections in 2015 and is the right thing to do for the overall budget.”
Prioritizing Economically Critical Infrastructure
As Utah continues to grow, our infrastructure and transportation system have to keep up. In
2015, Utah’s population reached 3 million and is estimated to reach 4.6 million by 2040. In order to keep Utah moving, we’re faced with the challenge of maintaining, and future-proofing our infrastructure.
Another integral piece of legislation was S.B. 277, Highway General Obligation Bonds Authorizations that approves a $1 billion bond for state transportation facilities, or $250 million year for four years. The bill protects the existing prioritization process set by the Utah Transportation Commission to determine projects that advance. Representative Schultz commented that this approach demonstrates Utah’s exceptional fiscal responsibility, confirmed by our state being one of a select few with a AAA bond rating.
“This is the first time we’ve bonded without a specific list of projects prescribed in the legislation, allowing for projects to go through the Transportation Commission’s standard prioritization process,” Osborne added.
This process will guarantee key projects will move up to address the state’s most critical transportation needs first. As such, the Coalition supports fully funding the prioritized needs identified in Utah’s Unified Transportation Plan, including finding solutions to address the remaining funding shortfall of nearly $8 billion by 2040 needed to improve the capacity expansion, maintenance, and operations of our state’s significant transportation assets.
Rep. Schultz said the Legislature is capitalizing on the great leadership of our state’s transportation agencies to commit all involved to disciplined transportation planning and investment in the future.
A New Tool to Address Utah’s Infrastructure Needs
The Utah Legislature has significantly increased its commitment to infrastructure over the past two Legislative sessions. Now revenue may not be the greatest limiting factor to infrastructure investment. According to a 2015 study, Utah faces an astounding $60 billion to both maintain and provide infrastructure at every level over the next twenty years.
This does not include the increasing demands for state dollars for capital facilities. Current practices emphasize projects being awarded to the lowest capital cost bidder with little attention to the life-cycle costs and operational risks of a project.
This requires new innovative approaches to infrastructure investment, finance and operations. To enhance the state’s legacy of infrastructure investment additional policy tools, specifically a state statute clarifying the use of Public-Private Partnerships, was needed.
To address this need, S.B.204, Public Private Partnerships was passed during this session. The bill enacts language relating to the use of public-private partnerships in the procurement of projects. This ensures Utah has access to another tool for procuring or managing public infrastructure with partnerships between the public and private sectors to allocate design, construction, financing and long-term maintenance risks to the party best equipped to address them.
The Utah Transportation Coalition has actively explored these types of partnerships over the last two years including multiple forums, meetings and presentations from leading experts on the topic to its members. S.B. 204 not only reflects a growing national interest in these types of partnerships, but also Utah’s need for another tool to procure, finance and manage extensive infrastructure projects.
The Utah Transportation Coalition is a group of business and civic leaders working together to protect Utah’s environment, improve the economy and preserve our quality of life through strategic transportation investments. The Coalition is an established, long-term organization advocating specifically for responsible transportation investment to keep Utah’s economy moving.