Wednesday, April 1, 2009

A new way to pay for our roads?...

We have passed a bill out of the House that has the potential to add a very valuable tool to the State's toolbox of items available to them to pay for our infrastructure. Besides taxes and fees, we have the ability for ITD to "earn" some of the funds they need without competing with business. A reporter from the Lewiston Tribune seemed to be one of the first to understand the potential, he writes:

BOISE - Last November, about the time Congress switched from billion-dollar to trillion-dollar bailouts, one of the more intelligent government money-making operations in recent years came to an end.
That was when, with minimum fanfare, the last of the 50 state quarters hit the market.
I don't know who dreamed up that project, but it was one of those ideas that makes you smack your forehead and wonder why nobody thought of it earlier. It was brilliant in its simplicity: Produce 50 new quarters honoring each of the 50 states, roll them out over a 10-year period, then stand back as coin collectors go into a numismatic feeding frenzy.
Before the program began in 1999, the U.S. Mint produced about 1.5 billion quarters per year. Since then, according to the Congressional Budget Office, production has more than doubled, to an average of 3.5 billion per year - an increase worth about $350 million in annual net profits, or $3.5 billion over the life of the program.
The project was such a hit, the mint plans to follow it up this year with quarters honoring the District of Columbia and five American territories (Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands and the Northern Marianas Islands). A decade-long project featuring quarters for various national parks will begin in 2010.
That kind of aggressive pursuit of market opportunities isn't typical of state or federal governments - for good reason. One wouldn't want monopolistic taxing entities, for example, to be influenced by profit motives.
However, the state quarters project demonstrates capitalism and government can occasionally combine to benefit taxpayers.
Rep. Marv Hagedorn, R-Meridian, is hoping to create a similar opportunity for Idaho.
Hagedorn, 53, grew up on a farm near Moscow. His folks and a sister still live in the area. He graduated from Potlatch High School, but it was working for the Potlatch Corp. lumber mill that changed his life.
"That's what made me decide to join the Navy," he said. "I was working the line next to guys who were missing two or three fingers, and the highlight of the night was when we'd throw knots at each other. I told myself I had to go somewhere."
Hagedorn retired in 1994, after 20 years in the service. Now, during his second term in the Legislature, he's hoping to turn Idaho into the U.S. Mint of commercial truck license plates.
Unlike personal vehicles, commercial trucks and tractor-trailers can be licensed and registered in any state, regardless of where a company is based. That, to Hagedorn, creates a marketing opportunity. He introduced a bill earlier this session that would encourage trucking firms to register their fleets here.
"I've been working on this for a few years," he said. "My objective is to find a resource the state has that would help relieve the tax burden on citizens, without competing with private businesses - and this is a great opportunity."
Idaho already offers a permanent plate that doesn't require yearly registration renewals. For a company like Wal-Mart, which has more than 50,000 tractor-trailers, eliminating paperwork and the need to match specific trailers with specific renewal stickers represents a substantial cost-savings, Hagedorn said.
Idaho law, however, currently requires out-of-state truckers to pay sales tax on the price of the trailer before they can buy the permanent plate. That makes it cost-prohibitive.
Hagedorn's bill would remove the sales tax requirement. Moreover, it authorizes the creation of special "business logo" license plates - meaning Wal-Mart or UPS or any other company could design their own plates, complete with corporate logo and marketing slogan.
"Everyone is looking to save a buck," Hagedorn said. "We can make this simple for corporations and help save them money just by changing state law. It costs $3 to make a license plate, and we'd sell them for $112. There are 5.6 million semi-trailers in the United States. That's a $627 million market."
Add in Canadian trucks, he said, and the market potential climbs to $1 billion.
"Imagine if we get just 10 percent of that," Hagedorn said. "In the past, we've looked at taxpayers within our border (to generate state revenue). This could bring in revenue from outside the state. There are opportunities out there. We just need to find them."
Hagedorn's bill is scheduled for a floor vote in the House this morning. If approved, it will move on to the Senate.

House bill H226 is now awaiting scheduling to be heard in the Senate Transportation Committee. It went through the House State Affairs and Transportation and Defense Committees as well as the House floor with out a single "nay" vote. I believe this is a great tool and could bring in millions that could off-set taxes we now pay.

Your thoughts?

3 comments:

Robert said...

Brilliant idea. Wish we had thought of this in Texas.

Good luck on the passage. Keep us informed.

Bob Goehring
Richmond, TX

owyheewine said...

Adding funding is one way of closing the gap. Improving efficiency is another. All of us remember countless times driving past road construction sites where most of the workers were leaning on their shovels. That is a case of bad project planning. If ITA has Fortran and Cobol computers keeping track of road status, they likely don't have modern project planning and scheduling software either. During my working life I saw construction worker productivity virtually doubled with the use of good planning software. While the department is updating their other software, they need to upgrade their planning tools also.

Rep. Marv Hagedorn said...

Update: This bill is beeing held in the Senate Transportation Committee for unknown reasons. I've been informed that the bill would have a hearing, but has yet to be scheduled.