Funding transportation projects can be taxing - East Valley Tribune: East Valley Local News

Funding transportation projects can be taxing

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Posted: Saturday, June 13, 2009 2:05 pm | Updated: 1:17 am, Sat Oct 8, 2011.

Elsewhere on this Web site is my story about how the tanking economy is kicking the legs out from underneath the financing of transportation/transit improvements. But could this revenue shortfall have been prevented, or at least the damage limited?

Elsewhere on this Web site is my story about how the tanking economy is kicking the legs out from underneath the financing of transportation/transit improvements.

Transportation plans go unfinished with fund cuts

But could this revenue shortfall have been prevented, or at least the damage limited?

For an answer, I spoke with Arizona State University assistant professor Aaron Golub, an expert in transportation planning and sustainability.

His reply: Yes, there are better ways to fund transportation improvements - but only in theory.

"It's very political," Golub said. "I could come up with an optimal financing scheme, and it wouldn't be pleasant to a lot of citizens."

As Golub explained, the fairest way to levy a tax is to hit up the people who stand to benefit and the people who will most use the service. In this case, that would mean a property tax (better roads/highways increase property values) and a gas tax (the more you drive, the more you pay for the asphalt under your wheels).

However, Golub noted, the first option isn't popular in Arizona and the second alternative isn't liked anywhere. (FOOTNOTE NO. 1)

"The gas tax, for some reason, has turned into a political hot potato no one wants to touch," Golub said.

But a sales tax, such as Proposition 400's ...

"The beauty of a sales tax is, everyone pays a little bit, so you won't ever get a massive movement against it," Golub said. "The burden is so dispersed, politicians know it's an easy win."

It seems to me a sales tax is an erratic funding source: It'll swamp you with cash in good times (and lead people to believe the money will go on forever), but dry up like a desert wash when the economy goes bad. Golub agreed, saying sales taxes provide higher spikes and deeper drops, compared with other revenue sources.

But Golub did credit the tax for "doing amazing things for the Valley," such as getting the freeway system built in a short amount of time. Without that, he said, we're Tucson.

And no one wants that.

FOOTNOTE NO. 1: Arizona's per-gallon tax of 19 cents ranks among the nation's 10 lowest. The U.S. average is 27.2 cents.

The federal gas tax, currently 18.4 cents, hasn't changed since 1993. Earlier this year, Transportation Secretary Ray LaHood said he wouldn't suggest a tax hike to pay for fixing crumbling infrastructure. Instead, he suggested as a solution public-private partnerships, such as toll roads.

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