Thanks to the Legislature, Utah is nicely positioned, far better than most states, to adequately fund transportation infrastructure — and to reap the accompanying economic rewards.
A statewide reliable multi-modal transportation system, with excellent mobility, is essential for jobs and strong economic expansion, especially in a state like Utah with rapid population growth.
And after many years of hard work by numerous individuals and organizations, the Utah Legislature, building on previous legislation, earlier this year established a firm financial foundation for the state’s transportation infrastructure.
Utah now enjoys one of the best transportation funding packages in the nation, including a fuel tax that doesn’t lose purchasing power every year, a local-option sales tax for local roads and public transit, along with a substantial state sales tax earmark levied in previous sessions. In addition, Utah’s infrastructure debt levels are reasonable, and bonds are paid off quickly.
Clearly, more remains to be done. Federal transportation funding remains uncertain, with Congress seemingly unwilling to establish a long-range funding plan. And public transit funding in Utah, while good, is less than many peer metropolitan areas in other states that levy the sales tax equivalent of a full penny per dollar for public transit operations and expansion.
Still, what the Legislature has accomplished is quite remarkable, and will benefit the state for decades to come. What’s more, some large highway bonds will be substantially paid down in the next few years, providing capacity for significant bonding for additional construction projects.
I recently interviewed Carlos Braceros, executive director of the Utah Department of Transportation (UDOT), to see how he’s feeling about transportation funding, post-legislative session. He is clearly pleased with the commitment the Legislature has made. These are good times to be in the highway business.
The state now has sustainable revenue sources for both capacity expansion and on-going maintenance, Braceras said. The fuel tax boost will allow the state to better maintain Level 2 highways, which are less-traveled roads, particularly in rural areas. It’s always cheaper to maintain roads in good condition than to have to completely rebuild highways. “This will allow us to pro-actively maintain those highways, reducing the long-term cost of ownership,” he said.
Compared to most states, Utah already does a good job maintaining its bridges and highways, Braceras said. But the new funding package will allow UDOT to do even better, reducing the backlog of 50-year old bridges that need repair or replacement. With the fuel tax now keeping up with inflation and the increasing costs of construction, the funding package makes highway funding sustainable over the long term, Braceras said.
Braceras was very pleased the Legislature stepped up to help local governments with their transportation needs. The increased state fuel tax will push an additional $22 million to $23 million to local governments. Counties, at their option, can also put a proposal on the ballot for an additional quarter-cent sales tax to pay for local roads and public transit.
Until now, local governments have struggled to pay for road maintenance and new projects, forced to dip deeply into their general funds because their share of the fuel tax didn’t provide nearly enough funding. While local governments are expected to maintain their commitment to funding transportation, the new money will help them avoid having to spend a larger and larger share of general fund money on transportation. Voters will ultimately determine whether the local option tax is implemented.
“Local money for transportation is such an important component,” Braceras said. “Counties that choose to pass the local option tax will be able to maintain their roads in better condition, which will improve their economic competitiveness.” He said local leaders will have to clearly outline the need for the revenue, and what improvements taxpayers can expect if they vote to impose the tax.
While Braceras is pleased with the overall state of transportation in Utah, he said UDOT still faces a very difficult challenge: the ability to attract and retain top-notch engineers and other highly-trained employees. “We’re seeing a significant bleed-off to local government and private companies,” Braceras said. “Our budget office has lost highly-skilled accountants to counties for 40 percent more pay. We’re also seeing it with engineers, land surveyors and other jobs.”
UDOT outsources more engineering and construction management work, percentage wise, than any state in the country, Braceras said. But the agency still needs capable, well-trained leaders to manage projects and negotiate with and oversee consultants. UDOT pay schedules are at least 20-40 percent lower than counties and the private sector, he said.
What’s especially frustrating, Braceras said, is that a college engineering graduate needs four years of work and training to become a professional engineer. Another six years of work and training are needed to lead and make key engineering decisions. It’s at the 10-year point when engineers and other technical staff become valued employees capable of leading projects. And that’s when they can make a lot more money outside of UDOT. “So we spend a lot of time and money training them, and too often they leave.”
In past years, more employees would stay long-term to maintain the value of the state’s defined-benefit retirement plan. But the state no longer offers those benefits, so the “golden handcuffs” are gone, and employees have little incentive to stay if they can earn more money elsewhere.
“It’s really tough,” Braceras said. “I’m not asking for an increase in the number of employees, but skill levels in this department are only going to increase. Our work is becoming more and more technical, and people with the skills we need have a lot of options.”