2014 Interim: Transportation Update

With only 2 more interim meetings to go (October and November) before the start of the 2015 General Session, discussions on some of the more complex issues are underway this fall. One such issue is transportation. This is an issue that has impacts statewide, though some of the needs vary depending on where you call home.  The Wasatch Front’s transportation needs have more to do with congestion and capacity, while rural Utah’s concerns lie more with impacts to secondary roads that now carry more cars and heavy trucks that they were originally intended to serve. The entire state has aging infrastructure, specifically bridges, that are reaching the end of their designed life span.

To a certain extent, some of the transportation deficits are the result of things that show we have a growing population and economy. A dynamic population and economy are, of course, very good things to have and for the most part this natural growth gives us enhanced funds for many needs. Since our unemployment is low, we naturally see an increase in funds from income tax without raising the existing tax rates at all. In fact, the State’s fiscal year just ended with a $166 million surplus, mostly in the area of income tax, which after moving some to our Rainy Day Fund, will leave $112 million that will flow into public and higher education because income tax is dedicated to those two areas.

The one area of tax collection over that has been on a downward trend for many years is the gas tax, our traditional dedicated source of transportation funding. This tax is a fixed amount per gallon of gasoline and the rate has remained unchanged since 1997. However, the way we travel and the cars we use have changed dramatically since the last rate adjustment. Our traditional gas cars now have significantly improved engines and emissions that have resulted in much better gas mileage. It is now quite common to own or know someone that with a hybrid, electric or natural gas vehicle.  All of this means, we are buying less gasoline resulting is less of the tax being collected. This shouldn’t be interpreted to mean we are actually driving less. The opposite is actually true. Between 1990 and 2010 Utah experienced a 78% increase in vehicles miles traveled. The problem is pretty clear; we drive more and collect less.

We have a funding problem that is pretty widely accepted, but the fixes vary greatly. My natural inclination is not to raise taxes, but to find a better funding fit for the need. We have a history of pairing needs with a related funding source.  For instance we paired education with income tax. If the gas tax is no longer a good pairing, what would a better fit be? The Transportation Interim Committee is looking at a lot of possible pairings from sales tax to vehicle registration fees to a hybrid that still includes the gas tax.  Each of these have pros and cons. I’m interested in solutions that keep any taxes transparent, uniform across the state and simple to administer.  Please chime in on this debate, the Transportation Interim Committee will be discussing this issue again on October 15^th and you can listen online or send your comments or thoughts to your legislators.