Transportation tax increase? Not so fast...

In today’s State of the State address, the governor is expected to give more details on a possible transportation tax package. Washington Policy Center offers five recommendations for lawmakers to consider before preparing a statewide transportation tax increase in 2012.

• Drivers pay most of the taxes and fees that fund the state’s transportation programs.
• Drivers have their own infrastructure needs and the taxes and fees they pay should fund road, highway and bridge improvements.
• Raising driver-related fees, raising the sales tax on the sale of vehicles and using roadway tolls, all to subsidize other travel modes are examples of how this practice is unfair and siphons off revenue paid by drivers that should instead fund roads that reduce traffic congestion and improve safety.
• All transportation taxes and fees paid by drivers should be restricted for highway purposes only, while alternative travel modes should be funded by their own users or through local tax options that apply to the general public, like sales taxes.

• A common myth among public transit agencies and the transit lobby is that they are underfunded and need state money to further subsidize transit operations. This is not true.
• In 2010, there were 31 public transit agencies in Washington and they collected $2.05 billion in total revenues, which is roughly the same amount ($2.09 billion) as the three major revenue categories (Taxes, Fees, & Misc.) produced for the state’s entire transportation budget.
• In 2010, the 31 public transit agencies collected $1.23 billion in sales taxes, more than the entire state collected in gas tax revenue.
• Transit officials also claim sales tax revenue is volatile and unreliable as a consistent funding source, but public transit’s sales tax revenue has grown 150% over the last ten years, from $484 million in 2001 to $1.23 billion in 2010.
• Any new transportation revenue source at the state level should be used to pay for existing obligations or to expand highway capacity; it should not be diverted to new commitments, such as public transit.

• Before asking voters for higher taxes and fees, lawmakers should repeal policies that divert current transportation revenues and fees to non highway purposes.
• Under state agreements, tribal gas stations are exempt from paying 75% of state gas taxes, which amounts to $28.14 million in 2010, and tribes are allowed to spend the gas tax refunds on non highway purposes.
• In 2010, drivers paid about $114 million into the state’s multi modal account, which is used to pay for transit, bicycle, and sidewalk projects.
• Transportation officials are also required to pay state sales taxes on state transportation projects and OFM estimates WSDOT paid $62 million in state sales taxes in 2010 on its own capital construction projects, thus laundering much needed gas tax money into the General Fund.
• This means drivers lose about $204 million per year in highway improvements, which is equivalent to about 7 cents per gallon in the state gas tax rate.

• Highway maintenance is important but a statewide tax increase should also include increases in road and highway capacity.
• Travel demand is rising faster than the available supply of roads and highways.
• Traffic congestion continues to worsen.

• Studies show that imposing prevailing wage rules on transportation projects unnecessarily increases labor costs by 22 percent.
• The Federal Highway Administration estimates a typical Environmental Impact Statement took an average of 2.5 years to complete in the 1970s. Today it takes 6.5 years.
• Complex highway projects now take an average of 13 years to complete, and only a fraction of that time is spent on construction.
• Requiring mass transit on highway projects dramatically increases costs. Building light rail across the Columbia River for example, would cost about a billion dollars, which represents 30 percent of the project’s total costs; not to mention the millions in additional operating expenses that will burden local taxpayers indefinitely into the future.