Sat, Jul 05, 2008

News Elsewhere

Business leaders push plan to raise gas, sales taxes for road-building

By Howard Fischer
Capitol Media Services
Tucson, Arizona | Published: 03.05.2007
PHOENIX — Business leaders around the state have taken the first steps toward what could become a request for voters to raise their own gas or sales taxes — or both — to build more roads.
The group most immediately wants $500 million this year to accelerate road construction projects already approved by the state Transportation Board but, at current funding levels, not scheduled for construction for years.
Marty Shultz, lobbyist for Arizona Public Service, the state's largest electric utility, said funds could come from the proposal by Gov. Janet Napolitano to refinance the state's existing highway debt over 30 years. Now such borrowing is limited by law to 20 years.
But that "is just a cotton-picking drop in the bucket," said Roc Arnett, president of the East Valley Partnership, a coalition of business, education and political leaders in the suburbs east of Phoenix.
He said Arizona is going to need $20 billion over the next two decades, if not more, to keep it from falling into gridlock.
And while Arnett and Shultz said the new statewide group pushing for more road funds is willing to look at alternatives such as toll roads, the only realistic way to raise that kind of money is higher taxes.
One plan would raise the state's gasoline tax from its current 18-cent-a-gallon level. That has the advantage of being a "user fee," with those who drive the most paying the most. But it would take a 37-cent increase to raise a billion dollars a year.
The other main option is increasing the state's 5.6 percent sales tax. While not a user fee, it raises a lot of money quickly: A penny increase would generate between $700 million and $1 billion, depending on whether the state shares the revenues with cities and counties, the way it does with existing collections.
Arnett said lawmakers would never approve a tax increase themselves. He said that's why the business group, which includes chambers of commerce from around the state, wants legislators to put it on the 2008 ballot and give voters the final say.
And Arnett said once the measure was on the ballot, it could be sold as a "family values" measure.
The key, he said, is convincing voters the time spent tied up in traffic takes away from family time. "You want to be home to play Little League with Johnny and take Susie to ballet," he said.
Arnett said that's how voters in Salt Lake City were persuaded to raise a tax for the light rail system there.
But any tax increase would come over the objections of Sen. Ron Gould, R-Lake Havasu City, who chairs the Senate Transportation Committee. In fact, Gould said he would not even support having the Legislature send the issue to voters.
"I took a 'no new tax' pledge," he said, saying that covers expediting higher taxes. Gould said if business interests want to put the measure on the 2008 ballot "they can go out and get signatures."
But some of his colleagues, including Republican Sens. Jake Flake and Jack Harper, said they would be willing to consider sending the issue to voters.