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SALT LAKE CITY — A sweeping transportation bill that overhauls how UTA is managed now would raise the state sales tax by 0.15 percent starting in 2019 to raise $80 million annually for mass transit projects.
The latest version of SB136, sponsored by Sen. Wayne Harper, R-Taylorsville, the co-chairman of the Legislature's Transportation Governance and Funding Task Force, is expected to be heard in the Senate Monday.
"It really needs to pass because it creates the form and the structure for how the state deals with transportation over the next 40 years. It’s transformational," Harper said Friday.
But Senate leaders said it won't be easy to pass a tax increase. Not only is 2018 an election year for every member of the House and much of the Senate, the state is flush in new money.
Earlier this week, the House and Senate reported a total of $581 million available in anticipated revenue growth and surplus funds. That number does not include a windfall expected from federal tax changes and some dollars already set aside.
"It is hard," Senate President Wayne Niederhauser, R-Sandy, said of the tax increase in the bill, which would raise the state sales tax to 4.85 percent. He said the state is nearing $700 million in new money, something that hasn't been seen since 2008.
That was, of course, just before the recession.
"We're a touch concerned as we see this revenue come in," Senate Majority Whip Stuart Adams, R-Layton, said, noting an economy that has its ups also has its downs.
Harper said he's "externally optimistic" the bill can pass but said there may be changes.
His House sponsor and tax force co-chairman, Rep. Mike Schultz, R-Hooper, said the bill "has been a moving target. Let's see what passes the Senate and then we can have a conversation about it in the House."
Besides increasing the sales tax statewide for a new transit fund administered by the Utah Transportation Commission, the revised bill also would give every county the option of imposing a quarter-cent local option sales tax for transportation.
Counties that already have mass transit would have three years to go to voters for approval of the entire 1.05 percent local option sales tax before they could seek the extra quarter-cent.
A provision in the original bill that would have automatically imposed whatever was remaining of the 1.05 percent local option tax in 2022 has been removed, Harper said.
Voters in some counties, including Salt Lake and Utah, failed to approve the last local option sales tax offered by the Legislature in 2015. The defeat of what was known as Proposition 1 has been blamed on distrust of the Utah Transit Agency.
While the revised bill doesn't change plans to replace the UTA board of trustees with three, full-time trustees charged with running the agency, there is a name change. UTA would become the Transit District of Utah.
"What we’re saying here is we’re starting a new era for transportation and transit," Harper said. A new name is recognition that the transit agency is going to improve, he said.
The bill no longer boosts taxes on hotel rooms and rental cars, after Harper ran into opposition.
It does, however, still hike registration fees on electric and hybrid vehicles. In addition to the current $44 fee, owners of electric cars would pay another $150; hybrids, another $20; and plug-in hybrids, $120.
"It's really an equity issue. We want everybody to pay for the use of the roads," Harper said. He acknowledged that, along with the sales tax hike, the fee hikes were the most controversial portions of the bill.