Friday, October 30, 2009

Part III: Transportation Funding

Here is our third installment of the five-part legislative update series. Today we will focus on local transportation funding.

Part III: Transportation Funding

With the continued increase in costs associated with construction and maintenance of transportation infrastructure the necessity for local government to be adequately positioned to address the growing transportation needs of their respective communities is equally growing. In 2008, the local government portion of the motor fuel tax covered roughly 50% of the cost of highway construction and maintenance, and with the reduction in motor fuel tax receipts and the growing demand for infrastructure, we anticipate that gap to widen in 2009.

With that dynamic in mind, we are also cognizant that the State of Utah is facing an unprecedented economic downturn that will inevitably limit the state’s ability to enhance the current revenue sharing arrangement that exists for the current motor fuel tax. As both the state and local government grapple with shortfalls in their respective general funds our ability to continue to subsidize transportation construction and maintenance with general fund revenues is diminishing significantly. While we all recognize that with a downturn in the economy it is difficult to look at revenue enhancements as an acceptable solution to the problem, we are anxious that if we do not get in front of this issue the cost to retrofit and repair dilapidated roads when the economy recovers will cost the taxpayers significantly more money than staying on top of the issue from the outset.

We would like to explore the opportunity of pursuing authorizing legislation which would allow counties, with the endorsement of the cities within the given county, to pursue a local option user fee revenue source to address critical transportation needs within the county. There are several facets to the concept that are outlined below:

  1. Pursue legislation that would allow the county to adopt an additional local/county option user fee (motor fuel tax/sales tax) to address transportation infrastructure issues within the county.

  2. Require that a majority of cities within the county must affirmatively request the county to examine the local option authority prior to implementation by the county.

  3. Require that a portion of all proceeds be spent on projects of regional significance within the county where the funds are generated.

  4. Require that the remaining portion of funds generated from the user fee be split between the various cities and the authorizing county based upon a statutory formula similar to the current local B&C formula (weighted lane mile).

  5. All funds generated within the county stay in the county where the funds are generated.

We would like to work closely with the legislature to examine this or other possible tools that may be pursued by local governments to address the important issue.