Unwilling to raise taxes, Ducey places hope in Trump for transportation funding

Isaac Windes//March 20, 2017

Unwilling to raise taxes, Ducey places hope in Trump for transportation funding

Isaac Windes//March 20, 2017


Gov. Doug Ducey plans to lobby the White House for hundreds of millions of dollars as Arizona’s transportation infrastructure reaches what state, city and business officials are calling crisis levels.

If the governor delivers, it will be the first big major infusion of transportation cash in a while, as previous efforts to raise money for roads have faltered. The Republican-dominated state Capitol is also unwilling to consider any tax hike to fund road projects. Instead, lawmakers have throughout the years conveniently raided money set aside for roads and used it for maintaining various state operations.

Eric Anderson, transportation director for the Maricopa Association of Governments, said despite local governments’ best efforts, road quality problems permeate throughout much of Arizona, including in some major cities.

“In many areas, it is a real problem,” Anderson said, adding that the challenges are amplified in smaller communities, which don’t have strong revenue sources and are struggling even with basic street maintenance.

“In some cities and towns, it already has reached kind of crisis level,” he said.

Anderson said streets, for example, should be repaved every five to 10 years, depending on use. But a lack of funds has caused cities to delay this work, causing further structural damage and making repairs more expensive in the long run.

“If you defer maintenance on it for a long time, you basically have to rebuild the road, which is a big deal obviously,” he said.

According to The Road Information Project, a national nonprofit research organization, 12 percent of Arizona’s major roads were in poor condition as of 2016, and that’s costing motorists.

The report said driving on roads in need of repair hits each motorist with roughly $400 in additional vehicle repairs and operating costs. That’s about $2 billion a year that motorists could have saved.

Arizona politicians’ lack of appetite for any kind of tax increase isn’t helping, according to transportation funding advocates.

A main revenue source for maintaining roads is the Highway User Revenue Fund (HURF), which is funded by a variety of fees and taxes. But Anderson said Arizona’s low gas tax rate is contributing to the lack of transportation funds.

“Arizona’s gas tax ranks among the lowest in the country,” Anderson said. “A modest increase in gas tax would do wonders for cities and counties to maintain what we have on the ground today.”

But the Governor’s Office is opposed to any kind of tax hike.

“We have made a lot of progress over the last several years,” Daniel Scarpinato, Ducey’s press aide, said. “If we raised taxes, that would really put a wet blanket on all that progress and slow down the economy.”

David Martin, president of the Arizona General Contractors Association, said the failure to adjust the gas tax to account for inflation has meant losing great amounts of purchasing power.

“Not many know that the gas tax at 18 cents is static. They don’t take any more or any less if gas prices rise or fall,” Martin said, adding that has been the case since the early 1990s. “We’ve lost 43 percent of our purchasing power alone, yet there is 29 percent more lane miles in Arizona since then.”

Members of Martin’s group build most of Arizona’s infrastructure.

“As goes the funding, so goes our members’ ability to hire and create jobs,” he said.

The contractors association has supported various regional and statewide efforts to keep funds flowing to infrastructure projects. But their efforts can only go so far, Martin said.

“We also believe that eventually, the state is going to have to address this on a statewide level,” he said.

Tucson’s roadway woes have often been cited as an example of what happens when transportation funding becomes insufficient.

Transportation funding advocates said those woes affect the city’s – and therefore the state’s – ability to attract businesses.

Martin said roads don’t have to be totally perfect.

“But I think the roads in Tucson get noticed by people who are looking to relocate business there,” he said. “If you extend that example statewide, if we don’t do something in the next two years, you’re going to see many, many communities across the state in a really pretty dire situation relative to their streets and roads.”

But Ducey’s office said other state’s infrastructures are far worse.

“I would counter that with some of the rankings that came out comparing our infrastructure to others,” Scarpinato said. “L.A. is the worst place in the world for traffic. Go to Detroit, or some of these cities in the Midwest, and then come back here.”

Efforts to persuade policymakers to hike the gas tax are just one part of the equation. The other part is to dissuade lawmakers from raiding HURF and using the money for other state operations.

“We also work extraordinarily hard to encourage the Legislature to discontinue their transfers from the Highway Users Revenue Fund,” Martin said.

Last year, the state budget included $87 million for road projects, but the governor’s proposal for FY2018 discontinues those funds. Ducey, however, faces resistance from lawmakers, particularly those who come from rural areas.

Sen. Steve Farley, D-Tucson, insists that the lack of roadway funding is hurling the state into a self-inflicted crisis and pulling back Arizona’s economy.

“Like all cities and counties in the state, we’ve been suffering from the diversion of HURF funds by the state Legislature and the governor, who have been taking up to $120 million dollars a year and putting it into the general fund as opposed to (putting funds) into the roads where they should be going,” Farley said.

He insisted that transportation is a nonpartisan issue.

“The roads aren’t red or blue – they’re grey. This is not just rampant government spending. This is an attempt to invest in ourselves. Over time, we take a little bit from each of us and put it into something that all of us can benefit from. Everybody gets a huge return on that investment,” he said.

“If our grandparents and great grandparents had the courage to be able to build the best transportation system in the world, then we ought to have the courage to figure out how to maintain it,” Farley added.

Something as simple as raising the gas tax would offer a temporary fix to a long-term problem, he said.

The problem, he said, is obvious: In a decade or two, gasoline will play a much smaller portion of cars’ fuel mix as more electric cars are deployed on the road. Electric cars, of course, don’t need gas; hence, they don’t pay the gas tax.

Farley isn’t alone in his efforts to raise money for transportation.

Sen. Bob Worsley, R-Mesa, is pushing two bills, one of which would allow counties to ask voters if they want to create a county-specific gas tax. His other measure would allocate new funds to support the Arizona Department of Public Safety, instead of sweeping HURF to fund the department’s operations.

Ducey’s office said that transportation infrastructure, while a problem, is something that Arizona has the means to deal with.

“Arizona has been at the forefront of planning when it comes to transportation infrastructure,” Scarpinato said. “The rural areas do need attention, and we need to stay on top of it, but we have a good foundation to build off of.”

Ducey met with the new secretary of the U.S. Department of Transportation in Washington D.C. recently, and the governor plans to vie for infrastructure dollars.

In President Trump’s first address to a joint session of Congress on February 28, he said he would invest a trillion dollars in infrastructure projects, creating “millions” of jobs across the country.