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Day 1 - Our legislative agenda

The Utah Taxpayers Association will be promoting the following agenda at the 2007 General Session of the Utah Legislature:

Education Reform
Vouchers for low and moderate income students (Rep. Steve Urquhart)
Click [
here] and [here] to see some of the comments we have posted on vouchers. We’ll have more information on the financial impacts of vouchers on public school districts.

Differential pay for K-12 teachers (Sen. Howard Stephenson)
Click [
here] to read about teacher pay in Utah. Increasing teacher pay is important, but pay increases should be targeted towards those areas where Utah has difficulty finding teachers, such as math, science, and special education. Increasing teacher salaries to the national average would be a lot less expensive than reducing pupil-teacher ratios to the national average.

Transportation Reform
Transportation corridor preservation
A major cost in highway construction is land acquisition. By purchasing land years in advance, Utah can save a lot of money because land values escalate tremendously as development encroaches on land that will be used for future highways.

Congestion pricing
We've written extensively on this issue. Click [
here], [here], [here] [here], [here], and [here] to read more.

Rails/roads prioritization – Rep. Wayne Harper
The legislature took a major step in transportation reform during the September special session by requiring local governments in Salt Lake County to develop a prioritization process for evaluating road and rail projects with emphasis on cost effectiveness of reducing rush hour congestion. However, some additional tweaks are still needed.

Other
Severance tax trust fund –Sen. Lyle Hillyard
Click [
here] to read about this bill. Separately, there will be a proposal to earmark some severance tax revenues for specific projects. We'll have more on that later.

Government assistance report - Rep. Mike Morley
This bill will summarize state expenditures for welfare program such as Medicaid, free and reduced price lunch, general assistance, and many other programs.

Truth-in-Bonding – Rep. Greg Hughes
This bill will require that local governments specifically and clearly state in the ballot language what the impact to property owners will be if a proposed bond is approved by voters.

Defending Truth-in-Taxation
Every year, there is a bill to weaken or gut Truth-in-Taxation even though Truth-in-Taxation works. Click [here] to see the evidence.
Tax cuts and slowing the growth in state spending
We'll be releasing a report in the next couple of days on state spending growth. Prepare to be shocked.

Quite a modest agenda :)

Quite a conservative agenda :-)

Isn't congestion pricing a regressive consumption tax disguised as a fee? Are you going to count revenue obtained from congestion pricing in your calculations of our overall tax burden? You're counting college tuition and payments to University Hospital so I'd think you'd include this, too.

Seems that congestion pricing is also a way to allow legislators signing that dumb Norquist pledge off the hook. Why not just tell Norquist to get lost?

And what's that goat on your chin, Mike? Between you and Vic, there appears to be evidence of a law of conservation of facial hair.

Craig Johnson
Draper

Craig,

Basically any argument used against congestion pricing can be used even more appropriately against the most commonly cited alternative, raising sales taxes. For example, we all know that sales taxes are very regressive.

Federal studies show that low income people are more likely to car pool than everyone else (no surprise there)so they are already prepared to handle congestion pricing.

And, yes, congestion pricing would count as a fee which is a form of taxation which would count towards our overall tax burden. However, by slowing the growth in rush hour VMT, Utah will spend less than if it relied primarily on increasing general taxes.

I am quite surprised by your opposition. Anyone who wants more general funding for education should support congestion pricing. In Huntsman's FY08 budget, more than $700 million in general fund dollars (including earmarked sales tax dollars that are unfortunately not listed as GF dollars in the governor's and the legislature's budgets) are being spent on transportation. Prior to the early 1990s, Utah tradtionally spent ZERO general tax dollars on state roads. User fees paid the freight.

While a case can be made for spending SOME GF dollars (working rainy day fund, for example), we should all admit that diverting this amount of GF dollars from higher education impacts both higher education and K-12 education.

If you are going to agitate for higher K-12 spending, you'll need to claw back income tax dollars from higher education ($674 million in Huntsman's proposed FY08 budget). And if that's going to happen, you'll need to claw back GF funding from transportation.

I am not necessarily opposed to the concept and I wouldn't characterize my support for education funding as agitation.

So logically speaking, if you are counting congestion pricing revenues as a form of taxation does that mean that those who support it are breaking their Norquist pledge? Am I misunderstanding what ATR is expecting of their pledge-signers? (If you couldn't tell, I think it's a stupid pledge, even if you agree with the concept).

While I was visiting Oslo I noticed they employed some form of congestion pricing using RF readers or some similar technology (the guy was hard to understand). Yes, it did convince more people to use mass-transit (bus, rail, and subway). I believe that congestion pricing would be much more palatable if there was a mass-transit system similar to what the Scandinavians have to support the change in usage patterns.

Also, in your proposal where would the revenues from congestion pricing be allocated? Would they get sucked into the general fund or go to a dedicated transportation fund? Would these funds get spent according to the county's prioritization process? Would the money stay within the county in which the revenue was obtained?

If, by your example, congestion pricing dollars go into the GF to offset higher ed's usage of the USF, are you saying that a purpose of congestion pricing is to subsidize higher ed? In a sense, that might mean that one use tax (cp) would be compensating for another use tax (tuition).

Regarding ed funding, I understand your argument though I believe it is a bit of a generalization-specialization logical fallacy. There are many other ways to deal with higher ed raiding the USF (as now allowed by the constitutional amendment). Not spending hundreds of millions on massive income tax cuts might be a good start.

From what I gather, then, congestion pricing is indeed a tax increase. If revenue neutrality or slowing govt. growth is the goal, what is then cut to offset this potentially rather large increase?

Craig Johnson

We can't speak for Grover Norquist or Americans For Tax Reform. You'll have to ask him/them yourself. www.atr.org

Revenues from congestion pricing would go to transportation, just like gas taxes and motor vehicle registration fees. The state constitution (Article XIII, Section 5 (b))requires fees, taxes and charges associated with operating vehicles on state roads to be spent on roads and related activity (drivers ed, highway patrol, etc).

Mass transit is not necessary to successfully implement congestion pricing. Car pooling, telecommuting, leaving earlier/later for work, and living closer to work are all options.

WFRC's own numbers show that the four proposed light rail lines are not particularly cost effective at reducing congestion, especially the Draper and airport lines.

Whether the CP revenues would be spent within the county where they were generated or even on the road where they were generated has not yet been determined. Currently, gas tax revenues are not allocated based on which county the revenues were generated (revenues go into a statewide fund), and drivers pay gas taxes to drive on roads that have already been paid for.

As far as subsidizing college students, the real goal in congestion pricing is to slow the long term growth in transportation expenditures. If that means more GF revenues for higher education to slow the growth in tuition or cutting taxes (we prefer both), that will have to be determined by future legislators and governors.

Regarding a net tax increase caused by CP, we are also supporting reductions in general taxes this year, just like last year.

Your comment about not cutting taxes in order to avoid diverting income tax from K-12 is interesting, but budget documents show that even if there were no tax cuts last year or this year, sizeable amounts of income tax revenue would still be diverted to higher education and large amounts of GF funds would be diverted from higher education to roads. The existing diversions -- as mentioned in my previous post -- are much bigger than any tax cut we got last year or we'll get this year.

Education vouchers and incentives for science and math teachers vs. other kinds of teachers are both a bad idea. The former would lead to the formation of elitist schools, while the latter would create a class system for teachers. Students all benefit by mixing with peers from all walks of life. Teachers should be paid by credentials and experience. They are paid because they TEACH, not by subject matter. ACK

Thanks for your explanations. I'll give these proposals some serious thought.

I'm not yet convinced that the possible remedies of carpooling, telecommuting, leaving earlier/later, and living closer to work, etc., will actually happen. When the price of gasoline rose sharply, consumption didn't really fall off. We just paid more.

So I have one final question - if the money for congestion pricing must go to transportation (thank you for the clarification), and you are supporting revenue neutrality, aren't you then talking about a large reduction to the income tax, and hence, an almost certain reduction to the USF? Can the governor's proposal of a hefty increase in education funding (which I support) work with your numbers or are your proposals mutually exclusive?

Craig.

Craig,

Two points regarding reductions in income taxes:

1. Income tax revenues are growing so a $100 million tax cut, for example, doesn't mean that K-12 will get less funding this year than last. In fact, schools received double-digit increases last year and will again this year.

2. More importantly in the long term, any reductions in income tax can be offset by diverting less income tax to higher education because less general fund money is being diverted from higher education to transportation.

ACK,

The elitist argument isn't valid. Vouchers will be means-tested which means only low and moderate income households will be eligible.

Why should teachers be paid by credentials and experience only? No other profession operates that way. Teachers have always argued that they should be treated like accountants, engineers, lawyers, and doctors. Merit and differential pay are the norm in these professions because these methods.

How many successful companies operate without differential or merit pay?

ACK,

I hit enter before I finished one of my sentences. Last sentence of second paragraph should read "because these methods work".

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