Minutes of a Public Meeting

 

MINUTES OF THE

DEFINITION OF NEEDS, RESOURCES AND REVENUES

MEETING OF THE

GOVERNOR’S TRANSPORTATION VISION 21 TASK FORCE

1:30 p.m., Wednesday, July 26, 2000

Arizona State Capitol

1938 Addition, 2^nd Floor, Library & Archives Room

Phoenix, Arizona

The Definition of Needs, Resources and Revenues Committee of the Governor’s Transportation Vision 21 Task Force met in official session for a meeting at 1:30 p.m., Wednesday, July 26, 2000 with Chairwoman Barbara Ralston presiding. Other members in attendance were Vice Chairman John Mawhinney, Joe Herrick and Frank Thorwald. Task Force member John Bivens attended the meeting. Also present were Alan Maguire, Mary Lynn Tischer, John McGee, Matt Carpenter and Lisa Pendrick.

Welcome, Opening Remarks

Ms. Ralston called the meeting to order at 1:38 p.m. and let the pledge of allegiance. She noted that a quorum of the committee was not present; therefore, no action could be taken at the meeting. She commented that she was hugely disappointed with the attendance but wished that it would not deter those present from their work.

Acceptance of Minutes for June 21, 2000

Action on the minutes was tabled until the next meeting of the committee.

Roundtable Discussion of Arizona’s Future Transportation System

A recap of the retreat was provided for reference by the committee members. Chairperson Ralston outlined her objectives for the discussion, that being to create prioritized principles on the committee’s desires.

Mr. Mawhinney suggested that the state couldn’t expect any extraordinary changes in transportation. It can anticipate incremental changes and should build on the existing system to accommodate growth and allow the taxpayers to get to work. He stated that the committee needs to understand the people’s ability to choose and accommodate their future, not direct it. He feels that the state will see 90 percent of the people using privately owned vehicles. He believes the state will see changes in fuels and believes that efforts need to be directed towards providing a multi-modal system that meets the needs of the people.

Mr. Thorwald commented that there is no intermodal system or connectivity currently, which is part of the problem in the past. He feels that the political jurisdictions are an impediment to the free flow of traffic. He added that the people want a convenient, free-flowing system conductive to their life-styles. He noted that time is a function of life-style.

Mr. Bivens agreed with Mr. Mawhinney with respect to future automobile use. He emphasized the need to preserve and improve the existing system to better use the assets that exist. He stressed the need to involve the people in the process. Other suggestions included getting school buses off the roads at critical times, improving inter-governmental cooperation, learning from transportation managers in the private sector, i.e. airlines and airports.

Mr. Herrick commented on the importance of obtaining buy-in from the metropolitan areas in order to ensure statewide transportation solutions. To this point, Chairperson Ralston asked if regionalization would make sense to address statewide challenges. Mr. Bivens said that the state needs to work within a framework that can accomplish regionalization and local governments. He noted the importance of bringing together planning as it relates to land use activities and transportation.

Mr. Herrick commented on the importance of agreeing on how to fund preservation. Dr. Tischer indicated that some states have a policy to first fund projects that maintain existing facilities. Mr. Mawhinney called for a state framework to identify criteria to get funding, ensure regional input and force accountability by local/regional jurisdictions to ADOT on the use of those funds. He added that the problem today is there is not enough money to meet the demand for even basic projects.

Mr. Thorwald called for a phased solution to resolve transportation problems, i.e. more high-speed commuter links. He noted that Virginia and California are using high-speed commuter links and selling capacity. They are using the funds to finance heavy projects. He felt that a long-term state budget was important, as was being creative with respect to funding sources. He agreed with the importance of making the best use of existing resources and suggested the use of reversible lanes during peak travel periods.

Mr. Mawhinney felt strongly that a regional transportation authority would be able to force local jurisdictions to work together, i.e. light synchronization, bus systems. He felt that neighborhoods should have some control and input, but they should not have the ability to stop projects. Dr. Tischer stated that funding that is available can be used to facilitate interconnectivity between transportation modes. Also, changes can be made in how state funding is allocated. Mr. McGee added that the state has some things in its favor in terms of funding, primarily HURF. He noted that the HURF needs to be augmented not simply defended. Mr. Mawhinney said that the committee needs to think about whether the state should continue to depend on funding sources that are tied to fuel taxes. Mr. Herrick emphasized that the fuel tax needs to be increased. Mr. Mawhinney suggested that enlightening the public as to transportation needs would result in the election of officials who would resolve the issue. Chairperson Ralston said that the public will always question what is in it for them and their life-style, and the committee needs to be prepared to address that question. Mr. Mawhinney added that what the committee proposes should have an immediate, direct and obvious impact on the public. All agreed with Mr. Thorwald that if the state has the public’s buy-in, it will have the buy-in of the legislature. Mr. Mawhinney called for a dedicated fund, which cannot be touched by the legislature, to pay for transportation infrastructure. Mr. Thorwald added that a dedicated fund should also pay for maintenance of existing facilities. He suggested that district engineers should be more involved with planning.

Mr. Maguire reminded the committee members that their proposal will be subject to the voter protection legislation. He added that compared to other states the Arizona legislature has not really tinkered with transportation funding or projects. Arizona is more needs based than other states. He asked the committee to consider the principle that transportation in Arizona will retain a heavy reliance on user-based systems and the fact that the tax structure can be used to change behavior and help the system operate better. Mr. Thorwald added that the structure must be tied to demand reduction. Mr. Maguire said there is an important distinction between demand reduction measures and capacity utilization. Mr. Thorwald called for copies of a study on demand reduction and capacity enhancement benefits. Mr. Bivens asked how the data used in the study might have changed in the five years given the recent telecommuting trends.

Committee members discussed the theory behind congestion pricing technology and asked if law enforcement plays any part in the problem. They discussed ways to encourage the use of multi-modal transportation systems, possibly through tax incentives. Mr. Mawhinney suggested changing bus routes to avoid travel on roads of regional significance. Staff and committee members discussed the differences between a public transit system and a mass transit system, noting that the system needs to be a time priced commodity. Dr. Tischer commented that there are two markets for transit services, time based and money based. Mr. Bivens stated the need to pay attention to trip purpose and the time of day people use transit services and adjust the bus routes based on that information. He suggested the use of different pricing for different needs/services. Mr. Maguire suggested the use of local bus service in off-peak hours and express bus service during peak travel periods. Mr. Bivens commented on the lack of bus transportation to the airport and called for planning facilities that would serve traffic generators such as the airport. Dr. Tischer suggested tying state funding to connections among modes. Mr. Maguire said that the concept of accommodating versus directing the future is an important point relative to transit.

The discussion returned to the need for immediate and obvious benefits to the public in order to get a road bill passed. Mr. Mawhinney suggested isolating a portion of the Task Force’s efforts to identify short-term benefits and projects. Dr. Tischer commented that many issues have to be addressed at the regional or state levels, and a local jurisdiction may not be interested.

After a break from 3:15 p.m. until 3:27 p.m., Chairperson Ralston recapped the discussion into 12 key points:

1. Improve people’s commute
2. Maintain and preserve existing assets
3. Create a state framework to control funding and long-term planning
4. Integrated highway and mass transit systems
5. Intergovernmental cooperation
6. Accommodate population growth
7. Private/public partnerships
8. Maintain economic viability
9. Answer "What’s in it for me?" to J.Q. Public versus the cost to him
10. Regional/local taxing authority with state approval for regional projects
11. Use tax structure to incentivize desired behavior
12. Identify/isolate immediate changes that can improve transportation issues

Chairperson Ralston emphasized five broad statements made in the discussion that should be kept in mind at all times:

1. Accommodate, not direct the future
2. Anticipate incremental changes
3. Automobiles will dominate
4. Impact of short-term opportunities
5. Being creative with revenue/design issues

Chairperson Ralston asked the committee members to choose their top five priorities from the 12 points and return the lists to her. Time was taken during the meeting to accomplish this task.

Update on Vision 21 Revenue Assessment

Ms. Linda Carpenter, Wilbur Smith Associates, revenue consultants to the Task Force, presented an overview of existing revenue sources, emerging issues and potential alternative revenue sources. She discussed how the current study is different from previous studies, noting that it is much more comprehensive than studies done in 1995 or 1997.

Ms. Carpenter continued with a comprehensive review of HURF revenues, which generated $982.8 million in FY 1999, future trends, the impact of inflation and fuel efficiency on the gas tax, and HURF revenue distribution. She noted that only the vehicle license tax is tied to inflation.

Mr. Mawhinney asked for a comparison between HURF trends and population growth/vehicle registration growth. He felt this would take into account changes in vehicles and fuel efficiency. Mr. Thorwald asked for additional information on the comparison between motor carrier fees and costs associated with road destruction.

Mr. Bivens indicated he was asked by Ms. Steffey to point out the amount of funding from the vehicle license tax that goes to local governments.

Ms. Carpenter discussed other major transportation revenues, including federal, state and local funding sources. Specifically discussed were funds distributed as a result of the Transportation Equity Act for the 21^st Century, regional area road funds, local transportation assistance funds, non-HURF vehicle license tax revenues, local revenues, federal transit revenues, aviation revenues and rail revenues.

Emerging issues were also discussed by Ms. Carpenter, including rising fuel prices, vehicle license tax, legislative commitments, and alternative-fueled vehicles.

Mr. Mawhinney asked Ms. Carpenter to evaluate the potential of congestion time pricing and HOT lane use. He asked for information relating to the impact of changing the point at which fuel is taxed from the pump to the distribution point. He asked for information as to how much fuel is coming into the state. Mr. Maguire noted that this may not be known, but the state does track the amount of fuel coming into the state for exempt purposes. Mr. McGee stated that there is very little fuel that is not taxed. Dr. Tischer indicated that there is a federal effort underway to look at the gap between fuel use and the use tax.

Mr. Thorwald asked for projections for the impact from fuel efficiency increases over the next ten years. Mr. McGee commented that the impact from fuel efficiency would not be as significant in the next ten years as the previous period.

Ms. Carpenter presented a comparison between Arizona and other states as it relates to transportation revenues for new and ten-year-old automobiles as well as various weight trucks. She discussed elements of state, local and diesel taxes, comparing Arizona to other states. Finally, she compared the vehicle license tax cost for automobiles and trucks in Arizona and other states.

Mr. Mawhinney requested historical data on truck tax/fee payment in Arizona. Mr. Thorwald additionally asked for information relative to materials used on roads that improve the survivability of roads.

Ms. Carpenter briefly touched upon the 1994/95 study of 25 alternative revenue sources in terms of overall feasibility for being a potential source for additional revenue for Arizona highway needs.

Several potential revenue sources were suggested by committee members: a utility fee assessed on homes for local street maintenance, a home sale transportation fee, transportation-related service sales tax, and looking at all tax exemptions to determine if any are transportation related. Mr. Maguire noted that a service sales tax would be difficult to estimate because no base has been established.

Ms. Carpenter outlined the next steps to be taken by the revenue consultants.

Call to the Public

There were no requests to speak.

Prior to adjournment, Mr. Maguire provided copies of a letter written by the Task Force chairpersons to the Task Force members. The letter discussed the need to adjust the Task Force’s schedule to accommodate the forthcoming election season.

Adjourn

The meeting adjourned at 4:55 p.m.

BARBARA RALSTON, Co-Chairperson