A Plan for Oregon's Transportation

By Senator Doug Whitsett (R-Distr 28)
For the Independent

The House of Representatives Democrat Caucus just released a draft plan to maintain and modernize Oregon’s transportation infrastructure over the next decade.  The draft plan represents a scaled down and amended version of governor Kulongoski’s transportation plan that was to be funded by $500 million in higher taxes and fees. This draft plan is the result of a bipartisan and bicameral work group that has been deliberating for several months. I want to emphasize that this is a draft plan that has not been adopted by, or agreed to, by all members of the work group. It has not been adopted by either political party.

 

The draft plan would raise $300 million annually from increased fuel and
weight per mile taxes, increased title and registration fees, and a
license plate replacement fee. The six cent per gallon (25 percent)
increase in fuel and weight per mile taxes would generate $163.8
million. The $16 (60 percent) increase in vehicle registration fees
would provide an additional $88 million. A $23 (46 percent) increase in
vehicle title fees would create another $34.5 million in revenue.
Finally, a $12 (240 percent) increase in license plate replacement fees
would add $16 million in tax revenue.

The plan provides that
the six cent gas tax increase would not take effect until the sooner of
either the occurrence of two consecutive quarters of positive state
employment growth, or January 1, 2011. It would allow the City of
Portland to impose a vehicle registration fee based on vehicle miles
travelled. The plan calls for a four year moratorium on any increase in
local fuel taxes or other registration fees. After four years it
provides more populous counties the ability to
increase registration
fees with approval of the Transportation Commission. Finally, it
requires voter approval of future increases in local fuel taxes.

$273
million would be dedicated to modernize, maintain, preserve, and
improve safety on our road system. The money would be divided 50
percent to the state ($136.5 million), 30 percent to the counties
($81.9 million) and 20 percent to the cities ($54.6 million). The five
counties in Senate District 28 would receive a little more than $11
million from the funding package for their road work. Cities within our
district would receive a little more than $1 million to maintain their
roads.

$24 million would be committed to "Flexible Funds" for
multi-modal transportation. The final $3 million would be dedicated to
rest area improvements. A portion of the state highway money would
include provisions for debt service on an additional $800 to $900
million bond or large highway congestion relief projects throughout
Oregon. The first bonds would be scheduled for sale in 2012 resulting
in debt service payment starting in 2013. The total annual debt service
on that proposed bonding increases to about $68 million by 2018 and the
debt would not be paid off until 2032. The entire amount to be repaid
cannot accurately be calculated because the bonds would be sold "as
needed" and the interest rates would be set by market price at the
time.

The proponents estimate that the $300 million package
will sustain an average of 4,600 Oregon jobs each year during the first
five years of implementation. This calculation is based on a formula
that predicts 14 jobs per one million dollars of highway expenditure.
These jobs include
direct employment resulting from road building,
indirect jobs in industries that support road building, and induced
jobs that result from the benefit of increased consumer spending. A job
is defined as full time employment for one person for a full year.

Oregon
receives about $350 million each year from the federal government for
the highway program. This year the American Recovery and Reinvestment
Act (ARRA) provides for spending $27.5 billion for building highway,
bridge, and other surface transportation improvements. Enhanced
passenger rail, freight rail and port infrastructure development is
also included. Oregon’s share of that additional federal money is about
$334 million. This ARRA money has a "use it or lose it" provision
wherein states must obligate half of the money by June 29, 2009, and
the rest by March 2, 2010, or it will be withdrawn and redistributed to
other states. The objective is to provide funding for "shovel ready"
projects to stimulate the economy by creating jobs.

The ARRA
also establishes a competitive grant program that will provide funding
for even more highway and bridge projects. It is expected that the turn
around time on these grants will be very short due to the current
economic situation. It is further expected that the grants will carry
provisions requiring them to be put to use within a short timeframe.

The
need for highway transportation improvements in Oregon is great. The
need for job creation in Oregon is even greater. It would appear that
all three of these state and federal highway funding proposals are
scheduled to be implemented during the same time frame. The number of
jobs that could be potentially created is significant.

Several important policy questions must be considered:

1.) Do Oregonians believe that increased spending on transportation infrastructure is the best investment of state resources?

2.)
Do the Department of Transportation, counties, and cities have the
capacity to put all those funds to use within the required time frame?

 3.)
Are Oregonians willing to pay an additional $300 million per year in
taxes and fees to fund the transportation projects that create the
needed jobs?

4.)
Are Oregonians willing to obligate the next generation with more debt
to pay for current transportation infrastructure development?

5.)
Will Oregonians refer any fuel tax increase to the ballot and shoot it
down in flames as Oregon voters did in response to the last attempted
fuel tax increase in 1999?

Your legislators will be voting on some form of a transportation package
within the next six weeks. I would very much appreciate your thoughts on
this important issue.

Phone: 503-986-1728  
900 Court St. NE, S-302, Salem Oregon 97301
Email: sen.dougwhitsett@state.or.us

 

Speak Your Mind

*