Group aims to aid state transit with tax hike - East Valley Tribune: News

Group aims to aid state transit with tax hike

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Posted: Saturday, April 19, 2008 4:07 am | Updated: 10:24 pm, Fri Oct 7, 2011.

A group of business leaders is hoping Arizonans are so fed up with getting stuck in traffic that they'll agree to pay another penny in taxes for every dollar they spend.

The TIME Coalition, composed of industry and business development groups seeking to boost the state's economy by improving transportation, will roll out a comprehensive $42.6 billion plan this week to build new roads and widen existing ones.

The plan also includes more than $7 billion for mass transit, including expanded light rail in Maricopa County, a new light-rail system in Pima County, additional buses and car-pool services throughout the rest of the state and commuter rail service between Tucson and Phoenix.

Those projects and more would be financed by boosting the state's sales tax by a penny - to 6.6 percent - for 30 years.

But members of the group, whose name is short for Transportation and Infrastructure Moving AZ's Economy, already are starting at a disadvantage.

The original plan had been to get the Legislature to give its tacit approval to the package and put it before voters. But Marty Shultz, a lobbyist for Arizona Public Service, said that fell through when the lawmakers who chair the House and Senate Transportation committees refused to go along.

That means an expensive effort just to gather the required 153,365 voter signatures by July 3 to put the issue on the Nov.4 ballot even before trying to convince Arizonans to approve the tax hike.

Sen. Ron Gould, R-Lake Havasu City, who chairs the Senate Transportation panel, said he doubts the plan will fly, especially with rural voters.

"You're going to take money out of my district to use in Maricopa County," Gould said.

But Roc Arnett, president of the East Valley Partnership - a local business consortium focused on economic development and a member of the TIME Coalition - said the package was purposely designed to include something for everyone in the state.

That even includes Gould's district, where the plan includes projects such as widening Interstate 40 and reconstructing London Bridge Road in Gould's hometown.

Shultz said Gould and others may have it backward. He said the state's two metropolitan areas would be "donors" to the rest of the state, and the trick might be to convince residents there, who already have tax-funded freeways and mass transit, to help finance projects in rural areas.

The prospect of a sales tax increase already has been endorsed by Gov. Janet Napolitano, who is pushing it as a stimulus package for the state's lackluster economy. She said more road construction means more jobs.

"And those are jobs that cannot be outsourced," Napolitano said. "If you're building a transportation system, you've got to build it right here in Arizona."

Arnett and Shultz said no official decision has been made to use sales tax revenue as the only funding source, but both acknowledged that there are obstacles to using the other likely sources of money.

Existing road projects are financed largely through the state's 18-cents-a-gallon gasoline tax, vehicle license fees and federal highway aid.

Hiking the gasoline tax by itself was dismissed as an answer, as each penny increase brings in less than $40 million a year.

Shultz added that as vehicles become more fuel-efficient, motorists will be spending less on fuel, making gasoline taxes a potentially decreasing source of revenue.

There has been some sentiment that development impact fees should be used, he said, essentially taxing the construction of new homes.

"The public believes that growth should pay for itself," said Shultz, but he noted that the new roads and transit improvements would benefit everyone.

Any proposal involving impact fees also would draw opposition from developers.

Spencer Kamps, lobbyist for the Home Builders Association of Central Arizona, said the purpose of impact fees, now levied by local governments, is to deal with the "impact" a new residential community has on the neighborhood. He said it's one thing to pay for new parks and fire protection, but Kamps said tacking $500 or more onto the cost of a home in Page to pay for freeways in Yuma makes no sense.

Kamps said that kind of approach ignores the strain that commercial and industrial users, who are not subject to many of the same fees, put on the road system.

The biggest challenge for the plan's backers might be convincing voters to spend money to build and operate a rail line between Tucson and Phoenix - with the possibility of extending it in the future through Surprise, Wickenburg and even Prescott.

Still, Arnett said he believes the demand is already there.

He said shuttle companies already run dozens of trips a day between Phoenix and Tucson, many of those connecting to Phoenix Sky Harbor International Airport, and that's in addition to all the trips in privately owned vehicles.

Gould, however, scoffed at the whole idea of rail, both intercity and commuter, as "elitist."

"They want the regular folks to use mass transit so the rich folks can drive their cars," he said.

Napolitano said she believes voters will see the value of the proposed tax increase if they "focus ... on the future that we are building."

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