This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Utah legislators feared to utter the words "tax hike" during the recession and the fragile economy that followed. But now business leaders, state administrators and local governments are pushing lawmakers to increase taxes for roads and mass transit, warning that doing nothing will have dire consequences.
"I think it's inevitable that we have to face it," Sen. Kevin Van Tassell, R-Vernal, co-chairman of the Transportation Interim Committee, said after a few panel study sessions on whether more funding is needed and, if so, how to raise it.
Several groups are working to build a case that transportation tax hikes are overdue and also to offer some political cover for lawmakers, many of whom face voters next year.
Strategy • Consider some recent chess-like moves toward a possible tax hike:
• Cities and counties are asking legislators to allow them to raise gasoline taxes by maybe 5 to 10 cents a gallon to catch up with maintenance of local roads. While that would require the Legislature's OK, local officials would take the heat for actually raising taxes. Cities, which hold elections this year, don't face them next year.
• The Salt Lake Chamber formed the Utah Transportation Coalition led by former LDS Church Presiding Bishop H. David Burton and Wells Fargo Bank Mountain Division Manager David Golden to push for transportation investment. It released a study last week saying economic benefits of such tax hikes would be far greater than costs.
• The Utah Department of Transportation, while not directly asking for more money, has been discussing with legislators how funds from gas taxes are not keeping up with needs and how UDOT had to halt all preventive maintenance on lesser-traveled roads, about 40 percent of all state highways.
• The nonpartisan Utah Foundation recently released a report saying that with current taxes, Utah will have an $11.3 billion shortfall over the next 30 years for planned, high-priority highway and mass transit projects. When looking at total needs not just high-priority ones it would fall $26.6 billion behind.
• The Utah Transit Authority has floated the idea in meetings with local officials of raising sales taxes to fund quicker expansion of rail and bus projects, but has found little support voiced. Salt Lake Chamber President Lane Beattie, however, endorses hiking sales taxes for transit. UTA has no current plans to raise fares now among the nation's highest but is looking to restructure them based on distance traveled instead of flat fees. The change may generate more revenue overall.
Tax woes • Officials say a main reason tax hikes are needed is that revenue from state gasoline and diesel taxes are falling far behind the cost of road maintenance and construction. The gasoline tax was last raised 16 years ago, when it went from 19 cents to 24.5 cents a gallon.
Taylorsville Mayor Jerry Rechtenbach, speaking for the state's cities at a June legislative hearing, said that, with inflation, the gas tax is now equivalent to about 15 cents in 1997 but inflation increased construction and maintenance costs by 300 percent since then.
Rechtenbach added that cities and counties which get about 30 percent of the state gas tax for local roads, while the state takes 70 percent for its highways figure that in order to have kept up with inflation, the gasoline tax would now need to be 36 cents a gallon.
Utah's 24.5-cent rate is lower than the national average of 30.6 cents a gallon for gasoline and 30.2 cents for diesel, ranking No. 28 among the 50 states for both. But Utah is higher than average among neighboring Mountain states, which average 23.1 cents a gallon for gasoline and 21.9 cents for diesel.
Besides inflation, another factor draining gas tax revenue is that today's vehicles are more fuel efficient. And studies show Utahns have been driving fewer miles in recent years as the recession has restricted consumer spending.
Nowadays, too, more cars use alternative fuels which either totally escape highway taxes (such as electric cars) or face a significantly lower rate (compressed natural gas, for instance, is taxed at 8.5 cents a gallon).
"In terms of current dollars, we're investing far less in our infrastructure today than any time in our recent history," Burton, co-chairman of the Utah Transportation Coalition, said. "Something's got to be done."
Meanwhile, sales taxes which provide two-thirds of UTA's overall funding and some highway funds took a dive in the recession. The belt-tightening came as the transit agency was building numerous expensive new train lines. So UTA cut night, weekend and bus service to afford operation of the new rail lines.
Consequences • As a result of dwindling tax revenue and rising costs, "infrastructure is deteriorating more rapidly than we are able to fix and repair it," Ogden Mayor Mike Caldwell told legislators on behalf of state local governments.
Rechtenbach added that the backlog creates a spiraling effect that puts local governments in an ever-deepening hole.
Work that would cost $1 in preventive maintenance if delayed could soon cost $6 for rehabilitation, or $10 for a complete rebuild if neglected too long, he said.
"Maintenance is cheaper than repair," Rechtenbach said, "but we can't keep up with either."
Meanwhile, state freeways and highways which often are more complex and larger than local roads face an even greater problem, said UDOT Executive Director Carlos Braceras.
What would cost $1 in preservation work eventually jumps to $4 for rehabilitation, then skyrockets to $25 when maintenance delays lead to total reconstruction.
Declining revenue forced UDOT to make a tough decision to stop all preventive maintenance on state highways with fewer than 1,000 cars a day to keep up the condition of freeways and high-use highways.
That means those state highways with 1,975 miles, or 40 percent of overall state highway mileage "we do not actively maintain. We react. We go out and fill potholes," Braceras said.
To maintain those lesser-used highways in their current condition would require an extra $40 million a year, he said. To bring those roads up to the better conditions of freeways and highly traveled highways "would take about an $80 million [annual] investment for at least 10 years."
UDOT also has a problem with many bridges nearing the end of their life span. Most freeway bridges were built in the 1950s, '60s and '70s and must be replaced soon. While UDOT normally replaces about 15 bridges a year, Braceras said, "that's going to have to increase to 50 bridges a year over a 10-year period."
Solutions • Legislators may look at a two-pronged solution, Van Tassell said: Raise gas taxes and, perhaps, impose a new tax based on vehicle miles traveled forcing those using alternative fuels or fuel-efficient cars to pay more. But he sees obstacles ahead.
Rural areas hate the idea of a tax on miles driven, Van Tassell said. "I understand that, because they drive a lot of miles. But they're also using a lot of highway."
The miles-driven tax could be difficult to collect. One idea is to read the odometer once a year when a car is registered, and levy a tax then but that method could force large lump-sum payments.
Van Tassell, who regularly drives between Vernal and Salt Lake City, said in his own case, "if I all the sudden had to write a check for $500, I may or may not be able to do that." He said some states have looked at voluntary programs to use GPS systems to track mileage and allow smaller payments over time, "but people don't like the government tracking them."
The Utah Foundation said the Legislature could also consider other ways to raise money for transportation, including charging sales tax on top of gasoline tax; making gas taxes rise automatically with inflation; and upping transit fares or parking fees. The chamber's Beattie said the Legislature should allow raising sales taxes another one-third cent to a full penny (per dollar purchase) for transportation, matching what he said many large metro areas charge.
Golden, a co-chairman with the Utah Transportation Coalition, said a wide range of possibilities "need to be explored, and vetted and talked through. At the end of the day, it has to come from somewhere. The relative merits are for us and others to examine."
Politics • Van Tassell said it helps politically for the Salt Lake Chamber to lead out on arguments that tax increases are needed. It also helps, he said, that cities and counties are pressing the Legislature to allow them to raise gas taxes locally.
"The political side of it is no one [in the Legislature] wants, as they go into an election after the next session, to [face] the fact that they raised taxes," Van Tassell said.
Burton understands the political reality.
"Someone has to lead out," he said. "The business community is uniquely qualified to do that because we [represent] such a broad base."
Still, tax increases remain one of the Utah Legislature's least favorite topics.
Rep. Keith Grover, R-Provo, co-founder of the conservative Patrick Henry Caucus, said a gasoline tax would be a tough sell with many conservative legislators in an election year, especially when the economy is still fragile.
"It is not a good idea right now. ... I think we still have some post-recession jitters," he said. "Outside of the property tax, gas tax is probably the most personal and offensive tax when I talk to my constituents" and one they would see constantly at the pump.
He said in an election year, all that a political opponent would need to say "is, 'Hey, they raised your gas tax' and it would be tricky."
Van Tassell said the recession pulled all talk of tax hikes off the table, but he believes the economy has improved enough to begin the conversation.
"We're starting to build a foundation," he said. "I hope that we come up with a good product in the end."
State gasoline tax rates
National average: 30.6 cents a gallon
Utah: 24.5 cents a gallon
Mountain states average: 23.1 cents a gallon