Saturday, June 24, 2006

Transportation Initiative -- Raise Sales Tax?

The Senate Site had an interesting post regarding a transportation initiative to increase sale tax in order to meet mass transit and highway expansion goals at an accelerated pace. The current debate is stemming as to whether the transportation tax proposal merits a debate during special session. Judging from the Senate Site post it sounds like it will not be debated during the special session. However, it is a question that has merit. Should we, as Utahns, increase our ranking in the US to the third highest taxed state in the nation for more roads?

As a state with such a high tax burden I would have to say I would feel quite concerned if such a tax proposal was passed without some major efforts to finance such projects through the private sector. Revenue bonds (this is on memory from the last finance class I took 4 years ago) could be an excellent method of raising some of these funds --revenue bonds are paid from revenue received from the project that the debt was used to finance. In reference to my last post, offering the wealthy tax credits for contributing to such projects could be another means of coming up with the needed funds. I hope the legislature will continue to look at all options before lifting the states taxes.

However, if all else fails, a raise in sales tax may be a valid method of funding the project. With rising fuel and energy cost, the per capita monetary benefits of using mass transit could possibly justify the tax burden citizens would have to absorb for those who use mass transit.

That comment feels rather hypocritical for me. I often find myself commenting that Utah's conservatism ends when it comes to taxes.


The Senate Site said...

Good blog.

I worry when trivial issues elicit a hurricane of public interest but deliberation on spending tens of billions of dollars barely registers on the richter scale.

Thanks for the thoughtful response, Pramaphil. Weighty issue.

pramahaphil said...

Thanks for visiting. I really appreciate the Senate Site as a great source of information regarding state policy.