Proposed sales tax increases demonstrate need for transportation reform
The need for transportation reform becomes more obvious every day, and it's time for Gov. Huntsman and the Utah Legislature to step up to the plate and make it happen.
This November, commissioners in Weber, Davis, and Box Elder counties will be asking voters to increase sales taxes by 0.25%. The increased revenue would be earmarked for transportation and transit projects, including corridor preservation.
This proposal would increase taxes by about $10 to $12 million per year in Davis County and by about $8 to $10 million in Weber County. In Box Elder County, tax increase would yield about $1 to $2 million per year.
Meanwhile, back at the Utah State Senate, Sen. Ed Mayne is calling for a full one-percentage point increase in state sales taxes and would dedicate this for transportation. This proposal would increase taxes by more than $500 million per year and would be the single largest tax increase in Utah history. It would also make Utah's state and local tax structure more regressive, even if food purchases are exempt from this tax.
Periodic increases in state and local sales taxes are exactly what the transportation lobby wants. Most people don't pay attention to sales tax increases, and most taxpayers are unware how much they are paying in sales taxes. A median income Utah family pays more in sales taxes than in property taxes as demonstrated by our annual report on tax burdens for a median income Utah family.
Raising sales taxes for transportation is a bad idea. Increased sales taxes do not encourage commuters to change driving habits by telecommuting, carpooling or living closer to work.
Real reform is needed. Implementing congestion pricing and increasing gas taxes while cutting general taxes such income taxes will slow the growth in vehicle miles traveled, which decreases the need for higher taxes. It's also a good idea for the environment. Gov. Huntsman could score some points with his counterpart in California if he promoted these reforms.
Prioritizing roads and transit projects based on cost-effectiveness of reducing congestion would ensure that our tax dollars are being spent efficiently. The current prioritization process is completely inadequate, as demonstrated by the hundreds of millions of dollars that will be spent building a TRAX line to the airport which will relieve no congestion. (Click here to read our post on the airport TRAX line).
The governor and the Utah Legislature need to show some leadership on this issue. Simply passing the buck to county commissioners won't solve the problem. If the transportation lobby gets its way, the recent tax cuts will be offset by tax increases in the future. In fact, it started happening last year with sales tax increases in Salt Lake County and Utah County.
