Utah Needs to Reform its Broken Transportation Funding Formula

Utah has faced unprecedented growth over the past few decades, and its transportation needs have increased alongside that of growth. But the method for maintaining and expanding transportation infrastructure relies on an antiquated formula that ignores inflation and fuel efficiency and consequently has failed to keep up with the needs of our current system.

H.B. 362, which I sponsored and has passed the Utah House of Representatives and is now in the Senate, seeks, in part, to remedy this and enjoys broad-based support by Utah’s cities, counties, transit agencies and the business community.

“A quality transportation system benefits every Utahn. A well-funded, well-functioning transportation system improves our air quality, supports our growing economy and enhances our overall quality of life,” said Salt Lake Chamber Vice President of Public Policy Justin Jones.  "H.B. 362 is comprehensive. It enjoys significant support from cities and counties across the state and the business community. It provides real reform to the gas tax so that the buying power of the tax keeps pace with inflation and provides local cities, counties and transit with the tools they need to fund their transportation systems.”

Transportation infrastructure has traditionally been funded through a unit tax of $.245 per gallon, last increased in 1997. At that time, the average gallon of gasoline was only $1.09, an effective tax rate of 22 percent.

In the years since this tax was last adjusted, the cost of a gallon of gas has varied widely and thus, that percentage has also fluctuated. The tax as a percentage of the wholesale per-gallon price has been as high as 22 percent and as low as around 7 percent.

To no one’s surprise Utah struggles to pay for necessary highway and road projects as a result of this failed funding formula. Inflation has consistently degraded the value of our tax dollars while infrastructure costs have continued to climb. More fuel-efficient vehicles, burning less fuel on the roadways, has also translated to decreasing tax revenues. That $0.245 in 1997 has lost nearly one-third of its value and is the equivalent of a $0.36 tax today.

As we look to reform our transportation funding mechanism, we must look for a solution that addresses the problem in the long term. Without changes to the formula itself, we will find ourselves right back in this same position in another decade or two, when another unit tax has lost a significant portion of its purchasing power yet again.

“Population growth along the Wasatch Front is predicted to double by 2050, placing added burden on our transportation infrastructure. Highways and roads in rural Utah – the lifeblood of Utah’s tourism, energy, and agricultural industries – are also badly in need of attention,” said Lincoln Shurtz, director of government affairs for the Utah Association of Counties.

“H.B. 362 represents an important step in addressing many of the state’s transportation needs,” Shurtz said, “and I look forward to the House and Senate reaching consensus on this critical piece of legislation."

H.B. 362 also authorizes counties, upon voter approval, to assess a local option transportation sales tax. The revenue generated from this tax would be divided between the county, cities and transit authority in areas where one transit district encompasses the entire county, while in the remaining counties it would simply be split between the county and cities.

The funds derived from such local tax could be used for any transportation project including traditional roads, trails, bike lanes or enhanced mass transit.

According to H. David Burton, chairman of the board of UTA, “The UTA Board of Trustees appreciates the work of the House of Representatives to pass H.B. 362, which addresses funding for transportation priorities identified by local elected officials in the Unified Plan. If the public supports the local option, it will allow us to provide more transit service and address air quality with more alternative fuel vehicles, such as CNG.”

H.B. 362 is the most practical, reasonable option available for us to preserve the value of transportation tax dollars and implement a long-term solution to fund our future needs.

Representative Johnny Anderson is an early childhood educator and small business owner. He is chair of the House Transportation Committee, representing citizens of Taylorsville, West Valley City, Murray and the Millcreek area in House District 34.