SALT LAKE CITY — Utah better come up with new revenue sources for transportation, a legislative task force was warned Thursday, because the gas tax is on the way out, like “a rock star playing a final concert” on a farewell tour.
"The current funding system is not sustainable," Baruch Feigenbaum, assistant director of transportation policy for the Reason Foundation, a libertarian think tank, told members of the Transportation Governance and Funding Task Force.
Feigenbaum, who compared the gas tax to a rock star at the end of his career, said even with the complicated indexing formula passed in 2015 and recalibrated this year to boost revenues, Utah's gas tax likely will sputter out around 2030.
In a presentation made over the phone, he offered a number of alternative revenue sources, such as toll roads along I-15 and taxing drivers based on miles driven, with higher rates applicable in urban areas and during rush hours.
The potential moneymakers could be tested through demonstration projects authorized by the Legislature, Feigenbaum said.
No action was taken on his proposals by the task force, which is expected to make recommendations to the 2018 Legislature on funding as well as if the state should shake up control of transportation agencies, particularly the Utah Transit Authority.
The task force's House chairman, Rep. Mike Schultz, R-Hooper, said after the meeting that no revenue source is off the table at this point.
"We're looking at all sources right now. I think we're taking everything seriously," Schultz said. "We know that the gas tax is going to be less and less and go away eventually."
Feigenbaum also said all users should pay an equitable share of the costs of maintaining Utah's transportation system, including those driving alternative fuel vehicles and even bicyclists.
He suggested Utah consider a separate tax for electric cars, and when it comes to ensuring bicyclists pay their way, look at imposing a tax on bicycle tires that he said has been accepted in Oregon and other states.
Public transit, funded largely through sales taxes, could see additional funds by tapping a “significantly underused tool” known as value capture, Feigenbaum said, that includes assessing new property taxes near transit lines and impact fees.
Concerns about UTA's transit-oriented development projects around several TRAX and FrontRunner stations have been raised in critical legislative audits and are part of an ongoing federal investigation. UTA has signed a nonprosecution agreement with the U.S. Attorney's Office that requires the agency cooperate with the investigation and submit to up to three years of federal monitoring.
So far, the investigation has resulted in the indictment of a former UTA board member, Terry Diehl, on charges related to allegedly misrepresenting earnings from a Draper transit deal in bankruptcy court.
After the meeting, UTA President and CEO Jerry Benson said what he took from the presentation on value capture was that transit-oriented development "was a legitimate strategy and we probably need to be looking more at that concept."
Schultz said the controversy about transit-oriented development isn't necessarily about the program that was approved by lawmakers, but about how UTA officials were involved in the projects.
He said UTA does need additional funding, but for that to come from the state would require more control. The agency is now overseen by a board appointed by state and local entities.
"I don't think there is the political will to give UTA state dollars under the current structure," Schultz said. But with a change in governance, he said some existing transportation funds could be shifted.
"Maybe there's the possibility of taking some of the money that we're putting toward roads and putting it toward transit projects," Schultz said. "I think that's something we need to look at."