Are Taxes Based on a Real Need?...

We had an interesting briefing today with ITD and the Governor's office requesting an increase of $200M for additional needs for "transportation" and $134M for additional (to the$450M already approved) GARVEE funding. This is a hard pill to swallow (as I've written about in previous posts) without understanding the real need and where these funds will and are going towards.

Let's just consider the $200M of "New Money" requested (and by the way, that means additional taxes or fees of $143 per man, woman and child of our state). Some of us are asking how this need was determined. Was it vetted through a public comment process where the public would understand the project and the costs to them of the highways, overpasses or public transport systems being recommended to them?

I'm wondering if we are now in an era where we can use communication tools like the Internet and other tools where the public could be better educated about the costs associated to their choices. If a pollster were to ask me if I would like to have a really nice 6 lane highway, I would likely say "sure!"... but if asked that same question while also telling me that it will cost me another $143 per year for every member of my family for the rest of our lives, I would have to reconsider and ask for other options...

There was some polling of citizens was done prior to the Legislative session asking our folks if they would approve of increased registration fees to add money to our transportation funding, 52% approved of that. I suspect that had they known that the bill they were looking at funding was $200M and their share was $143/person... the results would have come out just a bit differently. I wonder why that wasn't part of the question asked in the poll?...

I don't disagree that ITD needs more funding to meet it's current commitments, I just have to ask if those commitments are really meeting the needs of the people and if the people understand the costs of what they are now signed up for... are those commitments really the requirements?

Your thoughts?

A Road Less Traveled....

As I was returning to my office this morning from the Urban Land Institute meeting in the Grove Hotel I noticed something. After a full morning of discussions regarding how we are going to fund more transportation infrastructure (i.e. raising this tax or that fee) I suddenly realised that I seemed to be going almost twice as fast going back to the office at 11:00 am than when I came to the meeting at 7:30 am...

We discussed local option sales tax increases of up to 1 cent, increasing registrations, increasing fuel taxes, increasing property taxes... the "increasing" discussions seemed to be never ending. Everyone seemed to have a plan to fix our woes with some sort of increased taxes. We know that we have issues that need to be funded, but it was not until Gov. Otter's Chief of Staff (Jeff Malman) got up and mentioned that we are now also working on how we can better spend the dollars we do have... I know it's easier to just raise a tax here or there and throw money at the issue, but if we are not spending the money we have wisely, aren't we putting a band aid on the real problems?

Getting back to my drive back to the office... why was it that I had a much easier commute back to Meridian later in the day than I had to Boise in the Morning? Well anyone and everyone knows it's because we all need to get to work in the morning and then come home at night at about the same time.

This lead me to think that we might also have "social engineering" issue that compounds our infrastructure issue. Why do we all (repeat... ALL) need to use our roads at the same time? Typically it's due to local business desires to have their folks change shift or start their work day all about the same time.

We do have infrastructure issues that need funding and we are going to have to find those dollars somehwere. Within the mix of "increased tax solutions" that are on the table, shouldn't we consider some "social engineering solutions" as well? Just how much would it cost the state to provide incentives to business encouraging/requiring "flex" hours or a change their shift schedules to times outside of the standard morning and evening commutes? Can we compare this cost of influencing our social behavior to the millions we are talking about spending for (in the Treasure Valley) 4 to 5 hour period each day that our roads are jammed with traffic... ?

As an example, how many people at Micron alone are beside us in traffic the mornings trying to get to work? What if a company the size of Micron were to move their shift change from 7:00 am to 7:00 pm to say... 9:00 am to 9:00 pm? And what if they were to encourage their normal "8 - 5'rs" into a more flexible schedule? That single action alone could take thousands of cars out of the early morning and evening commutes and spread the higher utilization of the roadways over a larger period of time. Less time commuting means less impact on our air quality, better fuel economy and happier drivers.

Employers aren't going to resolve our lack of funding issues, but do play a major role in why we have traffic issues at certain times of every day. I hate to see us pay for and build a huge infrastructure that will only be flexed 4 to 5 hours of every day because we choose to be inflexable in our travel requirements.

We need to put some "social engineering" options on that table to resolve our transportation issues... it's going to take a package of things, this needs to be one that's considered.

Thoughts?

Mass Transit in the Treasure Valley...

A number of us from the Legislature in the Treasure Valley were invited to attend a briefing in Salt Lake last Monday regarding how their mass transit system has evolved. My intention was to learn costs per person, state funding, subsidies required and ongoing costs for maintenance and how that is managed.

The Treasure Valley Compass leaders ensured that we all met the major players in Utah that have been involved in setting up the transit system, expanding it and maintaining it. The Compass folks did a great job in ensuring that we got our questions asked and have promised to work with Utah in getting some of the data we requested.

There is no question that the public transportation system in Salt Lake is top of the line. They have a combination of bus, tram and light rail. Their system was originally started on a shoe string (much like the Valley Regional Transit Authority now), but was boosted through federal earmarks (around $500M if I recall correctly) and local option taxes of the six surrounding counties to Salt Lake of between 1/2 cent to 3/4 cent sales tax that is collected through the state. Utah has had local options taxes for quite sometime so you will find various sales tax rates throughout the state.

Utah's system thus far has cost the tax payers (both federal and state) approx. $1.5 billion dollars. The est. population in the six counties footing the bill (less federal earmarks) is approx. 1.2 million folks (just slightly less than the entire state of Idaho).

Inceases in local option taxes have been happening since the system was started, most run as a referendum that was done on a "quick sale" sort of effort by engaging with the public on the requirements shortly (within 4 weeks) before the vote was required. Their strategy was to ensure that any opposition would have little time to organize and coordinate an opposing view before votes would be made (sound familiar?) and worked absentee ballots hard as well to ensure passage of the increased tax.

No doubt that Utah's mass transit system is top of the line, however, I see no way that 500,000 people in the Treasure Valley would pony up the money for such a convenience.

One lesson that did hit hard was that Idaho must start early in purchasing easements for ANY kind of transportation planning, regardless if that's public trams, trains or roadways... it needs to be planned and purchased as early as possible. Land prices just continue to go up, waiting for "tomorrow" to purchase property for a bypass or a commuter train is just not smart business.

I appreciated being invited on the fact finding tour, I learned a lot. Utah started planning and funding these transit systems well before it was announced that they would be getting the Olympics, much to our surprise. I suspect that because they did invest in such a system, that it did bode well for their selection by the Olympic selection committee.

Idaho has transportation needs from city streets to the freeway, from buses to walking trails. We are going into debt now through GARVEE to get some of the issues corrected and, as I'm sure you've heard, we are still "$200M per year"short. We need to get creative, change the way we do day to day business in the way to manage our transit systems. I've posted some ideas previously (click here to read them) that we need to consider. Is it time to raise gas taxes, registration fees, fund transportation needs with General Funds or change our habits?

We don't have the answers or the money... do you?

Drop me a note at Marv@thg-inc.biz

Cheers,

H

Roads... Poor planning or booming econimic byproduct

We've all driven the I-84 "Oregon Trail" ruts between Meridian and Nampa. I remember not long ago when it was resurfaced where the asphalt used the first go-round didn't harden correctly and we had cars and trucks driving with 2" of asphalt stuck to their tires... seems this track of road just seems doomed to issues!

One might note when driving the rutted interstate, that the ruts line up with car tires and not truck tires, yup those ruts are made by our cars and not that truck traffic.

As you know, it is hard to get any more cars on that road during rush hour. Add some construction and we tend to mess up that commute even more. Notice as well, that Meridian is also not exempt from traffic issues... There are days, I just hate to go outside my subdivision here in Mallard Landing to go anywhere... I just dread the bumper to bumper traffic to get to the hardware store or to go out for a cup of good coffee. There is no doubt that we have traffic issues everywhere here in the valley, but what the heck happened to cause all these issues? Poor planning or something else?

Idaho has grown so quickly that we were 5th in the Nation last year for growth. The US Census Bureau has estimated Idaho's population as of July 1, 2006 to be almost 1.5 million... a gain of 2.6% over the numbers from 2005. Idaho non-farm employment growth has accelerated every year since 2002 with momentum pushing that growth to 4.6% in 2006. This is the strongest economic growth in our great state in over 12 years!

Is it a wonder that the population and traffic is exploding? We have jobs and are attracting employers to Idaho at an unprecedented rate... "If you build it, they will come" seems to hold true for Idaho. We have built good business tax advantages, broadband, transportation infrastructure and have an education system that has been meeting the requirements of those employers (we will discuss the Community College issue in a later blog). These things attract business and they have come. Our economic estimate is up from last year as expected because of this growth... State income as of the end of March was $1.809 Billion, where the estimated budget we used during the session expected $1.829 Billion.

Yes, there are a number of folks moving to Idaho and as the population grows, so does the traffic. I believe a little of both have had a compounding impact on how we can get around. The primary funds used for maintenance and repair are tax dollars received from fuel sales (both Federal and State). Even though the number of vehicles have gone up, the fuel used per vehicle has reduced over the years so the tax dollars received per vehicle has also been reduced at the same rate. Increased traffic with less dollars to maintain the roads, compounded by increased costs of maintenance is the recipe for what we are experiencing today.

As we experience the byproduct of our success to stimulate business and growth, we have to ask what the heck do we do now? We have many choices before us, I see few that will be a comfortable choice for any of us, but some must be made. Here are a few of the choices I see today:

1. Reduce ITD (ID Transportation Dept.) maintenance costs: (brainstorming here)...

ACHD, is it a value added organization or just a fluffy "middle man"? Should ITD provide road funds directly to the cities in Ada county for management of their road systems? Funds are allocated from ITD to ACHD for Ada county maintenance functions. Would we be better off cutting out some of the middle man infrastructure or would those costs just be duplicated in infrastructure Boise, Meridian and Eagle?

Studded tires, many of us used studded tires way longer than we really need to. Studs become little road grinders when we don't have ice on the roads... causing ruts, noise and dust pollution. Is there an alternative? OR and WA have completed studies that indicate they spend between $12M and $50M every year in studded tire mitigation and repair (ruts, new lines, noise and dust control). Does Idaho need to spend more money studying the fact that studded tires cause damage that requires extra maintenance costs annually? I believe we can safely assume that our annual maintenance costs fall within the $12 to $50 million dollar range as well (inclusive of city and county costs).

Public Transportation that would really reduce traffic. Adding more buses that have very low ridership doesn't seem to be the answer, they just add to the congestion. Would light rail that could be used all over the Treasure valley help reduce maintenance and growth costs by reducing the number of cars that travel on the roads?

... just a few thoughts here, any other ideas? I've asked ITD to look at some things that could reduce costs as well as increase revenue...

2. Increase Revenue: (again, Brainstorming here...)

Create an annual Studded Tire excise tax? These funds would be dedicated to the extra maintenance requirements caused by the damage done by studded tires or could be used to partially fund public transportation to help reduce local traffic and the damage caused by studded tires.

Increase taxes on fuel to help off-set some of those reduced taxes coming in per vehicle due to better fuel economy? That's a hard thing to do with fuel prices the way they are now. There are some folks that are stretched to purchase fuel to get to work as it is. (...and I hate to see any increased taxes)

Increase registration fees? Again, I hate to see us increase those fees and the Idaho Constitution keeps us from using all of those fee increases for just road maintenance. This action would likely need some sort of Constitutional amendment to re-apply some of the fees that were already increased for registration fees.

Increased Signage fees? Most will ask, "what the heck are you talking about?". ITD charges vendors for those little signs along the highways that point you to their business (lodging, meals, fuel... little blue signs with the vendors emblem on them). There are quite a number of these signs along the roadways and Idaho controls the rate of the fees paid for these signs. I have no idea about what type of revenue this could generate, but it's currently VERY cheap advertising for vendors (less than an ad in the yellow pages of your local phone book).

Is there a way to allocate revenue to where the traffic is while still taking care of the rural roads in Idaho that don't have the traffic to support their maintenance for public safety? Is there some sort of revenue stream that we haven't found to help with our road maintenance issues?

Our state's prosperity and growth allows us to enjoy many things here in the valley that 30 years ago, many of us couldn't even imagine. And for those visionaries that did imagine that prosperity and growth, it appears we missed planning for some of it's side effects...

Cheers,

Marv

Studies completed by our neighbors in Oregon and Washington:

Washington State Study

Oregon State Study