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Transportation projects may be hogging more than their fair share of state sales-tax money, so legislators discussed Wednesday how to shift money to other needs such as schools or a new prison.
Transportation Interim Committee co-Chairman Johnny Anderson, R-Taylorsville, said that sales of cars and auto parts generate about 17 percent of all sales tax in Utah — so he believes it is justifiable to spend up to that amount on transportation.
"We're exceeding that," he said. "We're heading rapidly to 22 or 23 percent."
Sales tax is one of many funding sources for transportation, along with gasoline taxes and car registration fees. The Legislature this year passed a bill to raise gas taxes by 5 cents a gallon — the first increase in 18 years — beginning Jan. 1, with more automatic inflation-based bumps to follow later.
Anderson said that with more money coming from the gasoline levy, maybe it is time to start turning back sales tax money that has been pegged for transportation.
"But it should not be done in one fell swoop," he warned.
Anderson added that it may be wise eventually to shift elsewhere the money that is now spent for debt repayment as road bonds are paid off.
At Anderson's request, the Utah Department of Transportation and the Utah Transportation Commission looked at whether they could make such funding shifts and still pay for planned projects needed to boost capacity on freeways and highways.
Carlos Braceras, executive director of UDOT, said they figure they can fund all those projects and also, beginning in 2017, set aside $10 million a year from sales tax as a contingency fund. It could be used for cost overruns on large projects, or the Legislature could shovel it to other needs.
Sen. Stuart Adams, R-Layton, views that $10 million a year as a possible "working rainy day fund" that the Legislature could raid for other necessities in tough times "for a year or two" but still generally tap as needed for transportation.
Anderson said pumping up that contingency fund over time also could allow UDOT to do projects with cash instead of borrowing, saving money on interest. Setting aside that money and shifting some over time could help ensure that no more than 17 percent of sales tax goes to transportation.
"You'll be hearing more about this," Anderson said, adding that his committee may write a bill on the topic for next year's general session.
This discussion comes at the same time that city and county governments are talking about possibly raising the sales tax for local roads and transit — saying the money is needed because their share of gas tax falls far short of their needs.
The same bill that raised the gasoline tax, HB362, also allows counties to ask voters whether to raise local sales tax by a quarter-cent per $1 in sales. Scores of cities are considering resolutions urging such an election this year.
In counties with mass transit agencies — such as the Utah Transit Authority — 40 percent of money from the increase would go for transit, with 40 percent to cities and 20 percent to counties for local roads. In areas without a transit agency, 40 percent would go to cities and 60 percent would go to counties.