SALT LAKE CITY — Utah lawmakers will need to consider imposing a standard sales tax on gasoline, raising the gas tax, increasing fees for public transportation users or some combination of those measures in order to pay for expected transportation costs through 2040, according to a report released Tuesday by the Utah Foundation.
The study used figures from the state's Unified Transportation Plan to estimate that transportation projects in Utah will cost $54 billion over the next 30 years. It will require an $11 billion increase from current revenue levels over that time period to fund the state's needs, according to the report.
“It’s such a long-term window that it’s not surprising that the ($11 billion) shortfall is so big,” said Stephen Kroes, president of the Utah Foundation, an independent public policy research firm. “What’s surprising is how long it’s been since the state moved on transportation revenue policy.”
The report listed pros and cons of several potential policy options legislators can use to update revenue models, increase funds and accommodate a state with the third fastest growing population in the country.
“We have one of the fastest growing states in the country, and a major portion of Utahns are packed into a confined area along the Wasatch Front, with mountains on one side and lakes on the other,” said Andrew Gruber, director of the Wasatch Front Regional Council, which authored the Unified Transportation Plan in partnership with the Utah Department of Transportation and other agencies.
“It presents a huge challenge for mobility and air quality. Because of that, it’s uniquely essential we plan for smart ways to accommodate this growth,” Gruber said.
All states are tasked to some degree with funding public transportation, promoting sustainability programs and maintaining an complex network of highways, but the Utah Foundation predicts Utah will grow more than 60 percent by 2030, further straining the state financially.
“That’s a very reasonable, middle-of-the-road prediction,” said Pamela Perlich, a senior research economist and metropolitan planning professor at the University of Utah. “Continuing this level of (population) growth is about as certain as it gets. How efficiently we manage that growth depends on what kind of development we encourage and what kind of development occurs. The future is not written in stone in that respect.”
Kroes noted that of all the policies examined by the study, applying the standard state sales tax to gasoline purchases would carry the most sweeping implications of any on the list — for better and for worse.
If state legislators did so, they would raise an estimated $10 billion to $20 billion. However, it would likely apply to residents regressively, meaning it would affect low- and middle-income families most substantially. The tax would also be volatile because it would be contingent upon the price of gas.
“It would raise quite a bit of money, and it would certainly be handy in that respect,” Kroes said. “But day to day costs for gasoline are a higher part of a low-income budget than it is for those with higher income. … Somebody with a high income, for example, can more easily afford a hybrid car.”
The report also weighed a solution in which the current gas tax is collected the same way it is now, but raised periodically — or at least adjusted for inflation. The state Legislature hasn’t raised the gas tax since 1997, and Utah Foundation’s research director Morgan Cotti says the state is less profitable from that tax than is has been in a long time.
“Adjusted for inflation, the gas tax actually has less purchasing power for the state than before they increased the tax in the '90s,” Cotti said.
The report estimates that periodically raising the gas tax would contribute between $3 billion and $7 billion in revenue between now and 2040.