Utah Taxpayer

Utah needs to address its transportation problems. A series of local tax increases is being proposed, and unless the following steps are taken, these tax increases will more than offset any tax cut at the state level.

The Legislature needs to establish a single priority list of road and transit projects, not two separate lists, based on cost effectiveness of each project with respect to rush hour congestion reduction
Currently, there are two priority lists: UDOT's priority list for roads and UTA's priority list for mass transit. The two lists need to be combined into one. Fiscal discipline requires that all potential projects be evaluated and compared against each other based on cost effectiveness of reducing rush hour congestion. Projects with best cost-benefit ratios should be funded first. Projects with poor cost-benefit ratios should not be funded at all.

The cost-benefit analysis needs to be based on addressing rush hour congestion, not improving access and parking conditions at special events such as concerts and football games. Transportation's most important role in economic development is getting employees to and from their workplaces in a reasonable amount of time and getting goods and services from suppliers to customers.

Where practical, congestion pricing needs to be implemented on all new roads and expanded roads, not just the Mountain View Corridor.
Congestion pricing is a mechanism to incentivize commuters to change their driving habits so new and existing highways are more efficiently utilized. By increasing the cost of driving on congested roads, commuters will have a financial incentive to car pool, live closer to work, use mass transit, drive to work earlier or later, or telecommute more often.

Unfortunately, federal law prohibits congestion pricing or tolls on existing highway capacity if these roads were funded with federal gas tax dollars. Hopefully, this will be changed in the future so congestion pricing can be implemented on all congested roads, not just new or expanded roads.

Is congestion pricing a form of "double taxation"? The Snake Oil Lobby (SOL) says yes. The correct answer is no. To see why, read page 4 of our June 2006 newsletter.

In the 2007 general session, the Legislature needs to approve issuance of bonds of approximately $1 billion to fund preservation of transportation corridors.
Government programs are advertised as "paying for themselves". While this certainly isn't accurate in many cases, preservation of transportation corridors certainly will pay for itself because buying open land now is a lot less expensive than buying land that has been developed or buying land whose prices are escalating because developments are approaching.

At the end of FY2005, the state's constitutional bonding capacity was $1.3 billion, up from $948 million at the end of FY2003. The constitutional bonding capacity has increased for two reasons: the value of taxable land had increased and the net debt of the state has decreased. The state's constitutional bonding capacity will be updated in the next couple of weeks, and this value will most likely be higher than $1.3 billion.

The statutory bond limit is lower than the constitutional limit, but the statutory limit can be easily increased by legislation.

A bond of $1 billion would cover most of the corridor preservation for transportation projects over the next ten to twenty years.

Bonding for capital projects is not deficit spending. Borrowing money to pay for operating expenses, which the federal government does on a regular basis, is deficit spending. Taking a mortgage on a house is not deficit spending, but buying groceries on credit is.

Over the next twenty five years, Utah's expected population growth of 62% guarantees that state and local governments will have to build more roads in the future, even if mass transit and congestion pricing are able to slow the growth in vehicle miles traveled. Buying transportation corridors now makes fiscal sense.

Posted by Utah Taxpayer on Thursday, August 03, 2006 at 8:10 AM | Permalink