After months of rumblings around the state capitol, a private coalition called TIME Transportation and Infrastructure Moving AZ's Economy has unveiled a $42 billion solution for Arizona's transportation problems. It can be summed up as tax and spend.
Under the proposal, the states sales tax would increase by one cent. By itself, a cent seems small, but this would make Arizona's state sales tax rate the fifth highest in the nation according to the Tax Foundation. Arizona already has the nations twelfth highest weighted sales tax rate--the states sales tax rate combined with the average city and county tax rates. The proposed change would move us to fifth highest, almost on a par with New York.
If high taxes are the first problem, spending is a strong second. Along with some good ideas, like spending on expansions of existing interstates, the proposal calls for more spending on mass transit. Unfortunately, transit has proven itself an efficient consumer of tax money and not much else. On average, fares cover only 40 percent of operating costs and none of the initial investment.
Arizona needs more roads, but the last thing our economy needs is more taxes. Current transportation plans need to be scrubbed of inefficient projects and greater emphasis needs to be placed on private sources of transportation funds.
Today the Goldwater Institute will release a policy report that examines Arizona's transportation challenges and suggests how to meet them without raising taxes. The bottom line is that with a little creativity and innovation, we can fund our transportation needs without raising taxes.
Dr. Byron Schlomach is the director of the Center for Economic Prosperity at the Goldwater Institute.
Goldwater Institute: More Roads to Travel: A Path to Transportation Solutions for Arizona
Goldwater Institute: Put a Cap on It: How to Control Government Spending and Balance the Budget
Arizona Republic: $42 billion proposed for state transit plan