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Transportation is the foundation of a strong economy

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For decades, Arizona was blessed with high quality, high capacity highways stretching from border to border. These commercial pathways carried Arizona businesses’ materials from suppliers and their products to customers. But growth and economic prosperity have filled the state’s key commercial corridors, and little capacity has been added.

Most goods produced in Arizona are shipped to customers by truck, and most of Arizona’s freight traffic moves west and east. Arizona’s most important markets are California, other U.S. states, (most notable Texas), and Mexico.

Arizona is pivotally located in the Southwestern United States. It is in the midst of eight of the 11 largest U.S. cities – Los Angeles, Houston, Phoenix, San Antonio, San Diego, Dallas, and Austin. (Only New York, Chicago, and Philadelphia are not in the region.) And the state is located adjacent to the growing markets of Mexico.

Southern California, Texas, and Northern Mexico form an economically dynamic triangle with Arizona at its heart! The triangle includes over 50 million consumers and enough economic activity to rank among the largest nations of the world.

The key routes include: I-10, I-8, I-40, I-17, I-19, and U.S. 93 (labeled in part as I-11). Most of these important roads have been preserved, but have not been expanded for decades of significant population and economic growth in Arizona.

The Arizona State Highway system also connects Arizona’s dispersed cities and communities. Some of the most important routes include SR 69, SR 85, SR 87, SR 90, and SR 95. These routes also now carry heavier traffic burdens with little expanded capacity over recent decades.

These interstates and state highways are primarily funded with revenues collected in the state’s Highway User Revenue Fund (HURF), which receives all revenues derived from charges on use of the roads and highways, such as gasoline and diesel taxes, driver and vehicle registration fees, and others. HURF also is distributed to cities and counties to support their local roads. (It is important to note the construction of the Maricopa County regional freeways, since the mid-1980s, has been primarily financed with a special countywide sales tax, not HURF revenues.)

HURF resources to maintain, preserve, and expand our road systems have fallen farther and farther behind. The effective purchasing power of the HURF revenues has been eroded by inflation over the decades and by the increasing fuel efficiency of newer vehicles, which purchase less fuel and pay less in fuel taxes. The last significant increase in the rates of these various taxes was more than 30 years ago in the early 1980s. Since then, the state’s population has more than doubled, the economy has grown by over five-fold, and inflation has doubled prices.

With an ideal location at the center of an economic dynamo and a favorable business and tax climate, Arizona is well positioned to continue to grow and prosper throughout the 21st century. Expanding and preserving our major state highways are essential to supporting and facilitating that growth and prosperity.

— Alan Maguire is the president and principal economist of The Maguire Company.

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The views expressed in guest commentaries are those of the author and are not the views of the Arizona Capitol Times.

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