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RTA will “gladly” trade operating subsidy for bigtime capital money

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Illinois

Regional Transportation Authority Chairman Kirk Dillard on Monday made the case for a new tax to help pay for mass transit infrastructure, arguing the agency has a more than $30 billion backlog in projects. […]

“Our gas tax has not been raised in Illinois since 1990. Its buying power today is 60 percent of what it [was], it’s not adjusted for inflation. And our infrastructure in Illinois is crumbling,” Dillard said. “My case on behalf of mass transit is we know for every dollar spent on mass transit, there’s a $4 return.” […]

“I’m open for any place to go for the needed infrastructure money. But if Gov. Rauner and the Legislature broadened the sales tax base in Illinois, sales taxes are a major component of RTA funding and it just makes sense that we be part of the broadening of the sales tax,” Dillard said. “I would gladly trade Springfield’s funding for an ability to have a permanent, stable revenue source either through a sales tax or a service tax.” […]

Asked if Rauner would warm to the idea of a tax to benefit mass transit in Illinois, a spokesperson responded: “Gov. Rauner supports investing in the state’s infrastructure but believes government reform is essential before revenue can be discussed,” spokeswoman Catherine Kelly wrote in an email. “Uncompetitive bidding is costing taxpayers millions of dollars every year, and we need to drive value in our capital projects.”

* Hinz…

Even though RTA is very cost-efficient compared with its peers, the agency will “get out a pencil” to change things further if need be, he said, mentioning the possibility of establishing public-private partnerships and getting venture capital involved. “Whatever the cut, we have to handle it.”

But the capital situation is truly dire, Dillard continued. Illinois’ 19-cents-a-gallon gasoline tax for transportation needs is barely worth half of what it was when it was established in 1990, he noted, and the federal 18.4-cents-a-gallon levy has lost 39 percent of its buying power since 1993.

“More than 20 states have initiatives pending to increase their gas tax or sales tax on gasoline or in some way fund transportation,” he said. “Even the folks in Iowa—Iowa—approved a (10-cent-a-gallon) fuel tax. And Los Angeles passed a referendum to fund mass transit.”

Dillard said ridership and property values along the CTA’s Brown Line have risen far more than citywide figures since it was rebuilt a decade ago.

* Meanwhile…

As Congress struggles to renew the federal transportation law and Illinois considers revenue options for transportation, a new report from the Illinois Public Interest Research Group and Frontier Group finds that drivers currently pay less than half the total cost of roads, and argues that while increasing gas taxes could fill the shortfall, it would leave other problems unaddressed.

The new report, “Who Pays for Roads? How the ‘Users Pays’ Myth Gets in the Way of Solutions to America’s Transportation Problems” exposes the widening gap between how we think we pay for transportation – through gas taxes and other fees – and how we actually do. […]

The new report pulls back the veil on the “users pay” myth, finding that:

· Gas taxes and other fees paid by drivers now cover less than half of road construction and maintenance costs nationally – down from more than 70 percent in the 1960s – with the balance coming chiefly from income, sales and property taxes and other levies on general taxpayers.

· General taxpayers at all levels of government now subsidize highway construction and maintenance to the tune of $69 billion per year – an amount exceeding the expenditure of general tax funds to support transit, bicycling, walking and passenger rail combined.

· Regardless of how much they drive, the average American household bears an annual financial burden of more than $1,100 in taxes and indirect costs from driving – over and above any gas taxes or other fees they pay that are connected with driving.

“The ‘users pay’ myth is deeply ingrained in U.S. transportation policy, shaping how billions of dollars in transportation funds are raised and spent each year,” said Tony Dutzik, co-author of the report and Senior Analyst at Frontier Group, a non-profit think tank. “More and more, though, all of us are bearing the cost of transportation in our tax bills, regardless of how much we drive.”

The full report is here.

posted by Rich Miller
Tuesday, May 5, 15 @ 11:41 am

Comments

Thanks to fracking, it is quite possible to find a means to raising the gas tax right now.

Comment by VanillaMan Tuesday, May 5, 15 @ 12:00 pm
The RTA sales tax is not real popular in DuPage county for a couple of reasons. Not nearly as many people use it because there is only token bus coverage, and money from the RTA tax is being diverted to other things.

Comment by DuPage Tuesday, May 5, 15 @ 12:08 pm
Kirk, be careful what you ask for. A “permanent stable revenue source” could mean future fund sweeps.

Comment by Sir Reel Tuesday, May 5, 15 @ 12:11 pm
IMHO, a cursory review the “Who Pays for Roads” report seems to ignore the freight/commerce aspect of transportation. The focus seems to be on per mile user costing, congestion pricing and bicycles/transit/multimodal. The issues and potential solutions are no doubt complex, as they note, however, commerce should be part of the discussion. It’s not just personal transportation; all taxpayers benefit when you have roads to transport grain and when UPS can bring you your Amazon order.

Also, Illinois, unlike 37 other states, does have a sales tax on gas that goes into the general fund.

Comment by Res Melius Tuesday, May 5, 15 @ 12:26 pm
How about removing the ethanol content requirement that reduces MPG and ends up costing drivers more at the pump? We have federal tax dollars that subsidize the corn/ethanol industry, then pay more in state fuel taxes than we should because the current ethanol fuel blend is less efficient.

I’m guessing the National Corn Growers Association would not be on board with this plan.

Comment by nixit71 Tuesday, May 5, 15 @ 12:49 pm
Let’s see…gas taxes are struggling to pay for highways, let alone other modes of transportation including public transit, and we want to make public transit even more dependent on them? Problems are easy to identify, solutions not so much. Res Milius also has a point on freight and commerce being a huge part of the overall equation of our transportation needs.

Comment by Six Degrees of Separation Tuesday, May 5, 15 @ 1:25 pm
Any comments in the report about how tollway users pay both the Motor Fuel Tax and tolls?

Comment by Anonymous Tuesday, May 5, 15 @ 1:42 pm
Any comments in the report about how tollway users pay both the Motor Fuel Tax and tolls?

Although the Tollway is arguably the most self-supporting transportation agency in the state, don’t discount that IDOT and the locals contribute their fair share of funding improvements to the toll system, in the form of paying for connections to it, roadway bridges over it, and sometimes buying land and performing studies for the Tollway. And most of that money comes out of (you guessed it) Motor Fuel Tax.

Comment by Six Degrees of Separation Tuesday, May 5, 15 @ 2:06 pm
I believe the portion of the National Highway System funds that are attributable to the Tollway’s 286 mile system (around $50M per year) goes to IDOT, as the Tollway Trust Indenture does not allow outside sources of revenue.

Comment by Bogey Golfer Tuesday, May 5, 15 @ 2:21 pm
===government reform is essential before revenue can be discussed===

Rauner’s legion of communicators is set on the same talking point.

Comment by walker Tuesday, May 5, 15 @ 2:27 pm
If we TRULY have a capital building crisis here, then it’s unconscionable to keep overpaying for state and local capital work under the wasteful “Prevailing Wage Act” Dillard knows this. Gee, I wonder why all his Cellini-esque “cement king” cronies won’t let him say anything about it? I also don’t recall him making a big deal about “sweeping” road funds for general spending purposes during his time in the Senate. If the funds were needed, he should have been screaming his head off. If they aren’t needed, then he’s lying now.

I’ll be looking for the IDOT and RTA project “needs” list. All projects should be identified as “urgent for life safety”, “desirable but not necessary for safety” and “desirable but deferrable for several years”.

The record for the RTA and CTA as being good stewards for taxpayer dollars has not been a successful one. Remember those state street kiosks specially made in Europe for about 5 times the price of simple bus shelters? How about the fortune they’ve spent on new stations? Many are nice, but the costly way they were designed was not appropriate for a cash strapped organization. Rail maintenance? That seems to be done pretty well under existing funding.

Bridges need to be kept safe, but this is not the time for the massive expansions that are primarily funded by the state and aren’t yet in the “pipeline” Illiana is a good example of a project that never should have moved forward given the state’s financial status.

Will Dillard stand to answer tough public questions from the taxpayers? I think not.

Comment by Arizona Bob Tuesday, May 5, 15 @ 2:51 pm
@nixit71 12:49 =How about removing the ethanol content requirement=

Ethanol was originally used as a pollution reduction additive to replace MTBE. Pollution has been reduced to where the air is far cleaner then the EPA target amounts. The state should abolish the emission test programs as they are no longer needed.

Comment by DuPage Tuesday, May 5, 15 @ 3:31 pm
The unfortunate part about paying for transit capital is people don’t realize that even if they don’t use transit personally, they still benefit from it. Not only does it provide immense economic opportunities, it removes congestion from already over-crowded highways.

Imagine if the RTA’s 2 million daily riders were instead trying to drive on the Stevenson, Eisenhower, Dan Ryan, and Kennedy every day.

Comment by Just Me Tuesday, May 5, 15 @ 3:46 pm
Imagine if the RTA’s 2 million daily riders were instead trying to drive on the Stevenson, Eisenhower, Dan Ryan, and Kennedy every day.

Realistically, most of the RTA’s 2 million daily riders are CTA riders, most of whom don’t compete with the expressway suburb-to-city “Metra” market, so they would also be on Cicero Avenue, Lake Shore Drive, Fullerton Avenue and other city streets in droves as big as the expressways.

I do value the presence of the RTA facilities…even though Metra fares have gone up some 40% in the last 5 years, a single day in a downtown parking garage costs $40, enough to pay for about 3 round trips from Chicago to the end of the line.

Comment by Six Degrees of Separation Tuesday, May 5, 15 @ 4:05 pm
Is there any such thing as a “dedicated tax” anymore?

Comment by walker Tuesday, May 5, 15 @ 6:26 pm
I don’t think the peer comparison, which shows RTA to be cost effective, takes into account the difference in cost of living in the peer areas. Adjusting for local cost of living is a better practice.http://www.rtachicago.org/plans-programs/performance-measures/peer-performance-reports

Comment by NoGifts Tuesday, May 5, 15 @ 7:20 pm
With more fuel efficient cars and even electric cars, a motor fuels tax alone won’t cut it anymore. Not only should the fuels tax be raised — with more efficient vehicles and inflation it takes up a far smaller share of the budget than it used to — but we need to begin bringing in either a utility tax or a road use tax or fee to cover electric vehicles. And we need to acknowledge the property tax’s role as well given the extent to which property values are boosted by mass transit.

Comment by Angry Chicagoan Wednesday, May 6, 15 @ 9:42 am