Tuesday, May 20, 2008

Transit Investment: Some Real-world, Reality-based Suggestions

Kudos to Std-Ex columnist Trentelman and one GOP State Senator

By Curmudgeon

Excellent column this morning in the Standard-Examiner by Charles Trentelman --- a fine example of the "reality based world" that our legislators, most of them, seem reluctant to live in, or at least to legislate in.

The title of Trentelman's column is "No Cheap Road Around It: The Future Is Going To Be Taxing." He looks at the number of cars owned an driven in Davis County as an example. Davis County's population is expected to bump up by about a third over the next dozen years, with about 60K additional cars in the county. And right now Utah needs $16 billion just to maintain the roads we have and build badly needed new ones. Cost of building and maintaining new roads into the future looks like a financial tsunami for Utah taxpayers, and it's absolutely on the way.

Trentelman talks too about the need for transit investment to take some [but only a fraction] of those cars off the roads.

What's truly appealing about the column is (a) its conclusions are based on research, on defensible numbers, not on [as is far to often the case], election-driven hopin' and wishin' and dreamin'. [Latest example: Candidate McCain's promise that if elected, he will reduce federal taxes still more and yet balance the federal budget. No he won't, not any more than Reagan or Bush Two did following similar campaign assurances.] And (2) Trentelman does not succumb to the American Public Revenue Syndrome [APRS]: that, somehow, we can have the government do all we insist that it do [in this case, build ever more capacious highways, and maintain them to high standards] without our having to pay for it through taxes. [APRS is epidemic across the spending spectrum, not just involving roads. We want excellent schools, but we don't want to pay for them; we want an excellent military, but we don't want to pay for it... and so on.]

And Trentelman's actually found a legislator... a Republican legislator... who is taking a hard look at the facts, and drawing the inevitable reality-based conclusions: Sen. Sheldon Killpack [R-Syracuse] who's talking about bumping the state gas tax another 14 cents a gallon and charging congestion tolls [higher tolls for driving during rush hours into SLC for example] to raise the $16 billion Utah needs for road building and maintenance. Imagine that. [And compare it to the la-la-land proposals of Senators McCain and Clinton that suspending the 17 cent per gallon federal tax on gas for three months this summer --- costing the federal highway fund billions of dollars without in fact guaranteeing even that gas prices would go down a single cent over the summer as a result --- is what needs to be done.]

Kudos to Sen. Killpack, and columnist Trentelman, for making some real-world, reality-based suggestions.


This Cracks me up said...

What's wrong with heavily taxing the morons who commute every day to SLC in their GIANT SUBURBANS?

HHLM said...

What's wrong with heavily taxing the morons who commute every day to SLC in their GIANT SUBURBANS?

Let these gas-hog cretins pay for their gas gobbling economic perfidity with their pocketbooks.

Yes, for the new "gas tax."

Curmudgeon said...

Well, the problem with that, "this" and "hhlm" is that working folk who drive, and must drive, small trucks to earn a living [plumbers, for example, and electricians and landscapers and delivery drivers and so on] get hit with those "punitive" taxes too.

If that's the tax that is necessary to build and maintain Utah roads [which are necessary for commerce to prosper in the state], then I'm for it. But I'd be opposed to any tax whose motivation was to punish, say, Hummer drivers or SUV drivers who bought for the prestige [they imagine] came with it, because other folks would get caught by the tax too.

What we could do, certainly, is to stop giving tax incentives to buyers of low mileage "prestige" cars. There was a time just a couple of years ago when buyers of Hummers got a fat federal [many hundreds of dollars] tax credit for buying one. Now, that was insanity.

But punitive taxes? Not a good idea as a matter of policy, I think.

dan s. said...


Among the revenue sources being proposed is not only a long-overdue gas tax increase, but also something much more insidious: diverting a substantial chunk of our state sales tax to highway construction.

They call this the "auto-related sales tax", because they like to do the bookkeeping as follows: Figure out what percentage of taxed purchases are for auto-related items, such as tires and license plate frames. Then legislate that this percentage of all state sales tax revenue be spent on highways, rather than on other general fund expenses such as paying the governor's salary.

A couple of years ago the legislature adopted this proposal at the 50% level, and our regional transportation planners are assuming that this will be upped to 100% in the near future.

What's the problem with spending "auto-related sales tax" on highways? Simple: This means that auto-related purchases are then effectively exempt from contributing to other general-fund needs such as the governor's salary. So when I buy new tires for my bike, I chip in toward the guv's salary, but when I buy new tires for my car, I don't. It's effectively a subsidy for auto-related purchases compared to all other purchases. And the last thing we want to do is encourage people to drive even more by subsidizing auto-related purchases.

Incidentally, we already do this with gasoline. The gas tax is spent on highway construction and maintenance, while gasoline is exempt from ordinary sales tax which would go into the general fund and help pay the guv's salary. Another difference is that the gas tax is charged on a per-gallon basis, rather than as a percentage of the price. It's long overdue for an inflationary adjustment, but the legislature has chosen instead to make up the revenue through the "auto-related sales tax".

Every once in a while you hear transit advocates call for spending a portion of the gas tax revenue on transit. The justification, presumably, would be that transit helps motorists by getting cars off the road and easing congestion. Whether or not you think this is a good idea, here in Utah it's incredibly naive. Our elected officials are actually moving in the opposite direction, diverting more and more sales tax revenue to highways. It would be a tremendous accomplishment just to stop this practice so highways were once again funded more or less exclusively by the gas tax. It'll be a long time before anyone seriously considers going further and spending gas tax money on anything other than highways.

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