Funding Utah’s transportation needs is a significant economic and fiscal challenge for state policy makers. Over the next three decades, Utah’s population is set to increase by over 60%. Coupled with this significant growth is the possibility of an increase in vehicle miles traveled. In the past, the state has relied on the Transportation Fund to support transportation projects, but this has changed in the last two decades as the state has had to rely on non-traditional funding sources. Despite the addition of these funding sources, revenue will not be sufficient to meet population, highway and transit growth.
This research report explains how transit, roads and highways are currently funded in Utah and provides information and projections on potential funding sources to meet Utah’s transportation needs. Fuel taxes are a convenient source for generating significant funds for transportation, and have been used in Utah for nearly a century. However, they suffer from significant economic disadvantages, especially from declining purchasing power as the tax rate is devalued by inflation and as vehicles become more fuel efficient. This report suggests several options to address this challenge: a biennial two-cent increase, indexing the tax rate to inflation or adjusting the tax every ten years. Depending on how a change in the fuel tax were to be implemented, it would garner $4-$7 billion in additional revenue by 2040.
Some states levy sales taxes on gasoline, either instead of or in addition to a state motor fuel tax. These have the benefit of generating additional revenue, though like all sales taxes, are regressive in nature. If such a tax were implemented, it would ideally be a supplement to the current per-gallon fuel tax rather than a replacement, and would generate $10-$20 billion by 2040. Other options include increasing motor vehicle registration fees, severance and refinery taxes, or implementing a tax on vehicle miles traveled (VMT). A VMT tax directly taxes drivers for the miles driven on highways and roads, and could generate $780 million to $5.9 billion in additional revenue. However, it would require a completely new system of collecting revenue and measuring VMT, and would need to be tied to inflation or require periodic increases in order be a stable source of revenue.
For transit funding, the largest revenue-generating option would be to enact a new property tax increment for UTA services ($5.8 billion). Other revenue options could provide smaller revenue-generating capabilities, including an increase in county-wide sales taxes within the counties served by UTA ($3.8 billion), increased fares, and increases in taxes on hotels or rental cars ($139 million).
Comments:
2 Responses to “Fueling Our Future, 2013-2040: Policy Options to Address Utah’s Transportation Needs”
Steve Kroes
Linda, thank you for your thoughtful comments. You are right to express concern about air quality, and certainly more needs to be done than only widening highways. Hopefully, you clicked the link to read the whole report and see more that we wrote about transit funding options. Admittedly, the report discusses more options for road funding than transit, because roads are a bigger component in our current transportation system. But we’re certainly not ignoring transit funding.
Also, we do plan a research project on Utah’s air quality later this year, and we hope to address some of the science and possible policies for improving air quality in our region. I’m glad you’re reading our research — stay connected!
Linda Johnson
I am deeply concerned by the general direction of the discussion about our Utah transportation system. As Natural Resources Director of League of Women Voters Salt Lake, I attend many meetings of the various transit and transportation boards, as well as almost every air quality meeting. It ‘s not particularly forward thinking to devote 61 words of 467 to transit funding in Utah, where our air is far from clean and the biggest culprits are we who drive…and drive…and drive. Today isn’t an inversion day, but the air is fairly brown looking down from Wasatch Drive at 4500 S toward the City.
There is a pressing need to cut automobile traffic in the Wasatch Front, not increase it. The way to do that is quite straightforward: Stop building more miles of wider highways. If, and usually only if, traffic becomes congested for much of the day, then people will ride transit. Cutting down car trips is entirely dependent on their being convenient.
There are highways UDOT is ready and willing to build which could be called necessary; for example, widening US 40 from Vernal to I-15. But I don’t believe the State should pay much of that cost. Maybe Utah should pay for some of it, but if the purpose is to enhance the oil shale and tar sands businesses, shouldn’t they pay for it? (Their industry is the most profitable one in the United States.) At least they should pay for the extra lanes; those will be needed just for the trucks.
On the other hand, shouldn’t a pipeline be considered instead of a double oil carrier truck traveling in each direction every minute 24 hours a day? Or perhaps a refinery close to the source? What will the air quality be like near the expanded oil highway? What will the air quality be at the end of this particular route, Woods Cross and the refineries. Are we sure it should happen?
But back to the Wasatch Front. Widening 1-15 is a really bad idea, building new parallel highways is a bad idea. The square footage of our highway system in the polluted Front should be left as-is, and eventually (with congestion, and any luck at all) some traffic will divert to Trax and UTA buses. Spend money and upgrade them.
I didn’t believe the facts offered re the physical damage done to one’s body when UPHE reported, so I read the research reports, and UPHE told the truth. There are too many people, especially young and pregnant ones, who will suffer permanent damage from every day of inversion they live through. I was in perfect health, but during the inversion months I developed acute [now chronic] bronchitis. As an old person, I’m really sorry I live here. My life expectancy just got halved this winter. I am not alone, or unusual.
I do think gasoline taxes have to be on a sliding scale to maintain the dollar equivalency of UDOT’s income. I think UTA needs the equivalent of a 1% sales tax throughout the entire area it serves–that should be enough to provide excellent service. The 30% or so of all new sales tax dedicated to UDOT must be sufficient to maintain the roads in excellent condition, and I really, truly don’t support a whole of of Wasatch Front highway expansion.
It makes me sad that Utah, a state full of intelligent people, can be so dumb about looking forward and planning for a realistic future. It’s really time to be thinking about a steady state economy and population in the Front. Through my other work, I’ve come to believe our current population is pushing the limits of the Front’s “carrying capacity,” for which the bottom line is water. And guys, it’s just not there–not last year, not this year, probably very undependably for the foreseeable future. You might think seriously about that sometime soon.
(These comments are mine alone, I explained my affiliation so you’d know my background)