Different polling shows either majority support or opposition to increasing the gasoline tax for infrastructure improvements. We’ll have a discussion on the concept of raising the tax with Tony Bradley, president and CEO of the Arizona Trucking Association, and Michael Hunter, vice president for state and fiscal affairs from the Goldwater Institute.
TED SIMONS: Coming up next on "Arizona Horizon," we'll discuss the idea of increasing the gasoline tax. And on this constitution day, we'll learn about the history of the bill of rights. Those stories next on "Arizona Horizon."
VIDEO: "Arizona Horizon" is made possible by contributions from the friends of eight. Members of your Arizona PBS station. Thank you.
TED SIMONS: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. A federal judge today refused to force the state department of gaming to issue a license to the Tohono O'dham nation's new casino resort near Glendale. The judge did allow the suit against the state's gaming director to proceed, but dismissed the governor and attorney general as defendants. Arizona's seasonally adjusted jobless rate for August came in today, 6.3%, that's up .2 of a percent from July, but .4 below where it today last year at this time. Arizona's August numbers are still well above the national unemployment rate of 5.1%. And the Arizona board of Regents released a report today that shows that less than half of Arizona high school graduates meet the criteria to enroll in the state's major public universities. The report also found that the rate has not changed over the past five years. Board of Regents president Eileen Klein says that the data indicates that educators need to do a better job of preparing students to transition to higher education. Different polling shows either majority support or opposition to increasing the gasoline tax. Here to talk about whether or not it's time to raise the gas tax is Tony Bradley, president and CEO of the Arizona trucking association, and Michael hunter, vice president for state and fiscal affairs from the goldwater institute. Good to have you both here. Thanks for joining us. Let's define terms, gas tax, what is it and how does it work?
TONY BRADLEY: Gas tax, flat tax on gasoline here in the state of Arizona. You pay 18 cents state gas for -- 18 cents federal. On diesel, 26 cents for diesel for the state tax and 18 cents at the federal level.
TED SIMONS: And this pays for federal transportation projects, which, in turn, help pay for state transportation projects, is that how it works?
MICHAEL HUNTER: Federal money distributed to the departments of transportations in the states and it siphons down through a labyrinth mechanism that goes into state and local governments.
TED SIMONS: Impact of the tax on Arizona transportation projects.
TONY BRADLEY: Before that basic numbers, each consumer pays about $10 a month in state gas tax to give you some parameters, $10 in federal gas tax. With what is going on in Washington, there has been uncertainty with the Federal Government almost, you know, highway trust fund almost going bankrupt every few months. So, it stopped projects from going forward because the state doesn't know -- if they start a project, they don't know if they can finish it and that increased costs and it is affecting how we build the roads and how quickly we're --
TED SIMONS: There is quite the impact on Arizona transportation projects.
MICHAEL HUNTER: There certainly is. If you think where citizens and taxpayers are actually touched by government, certainly on roads, congestion, potholes, it becomes an important factor for citizens and so citizens have cooperated in certain tax increases. Prop 400 was a sales tax, but recently prop 204 that was tied to education tax didn't pass. But those are different taxes than the gas tax. I think the argument that gets made about inflation not keeping up, and that it hasn't been increased since 1993, etc., the -- right now it is true that for every dollar spent on the gas tax, it's about 62 cents worth by today's numbers. But just because there is a gap in the number, citizens and taxpayers aren't held harmless for the impact of inflation. That is kind of a flat argument. What matters I think to taxpayers, and the evidence has shown this in the Arizona experience, what is the proposal? Does it make sense? And then I think the voters are more willing to cooperate with the exercise.
TED SIMONS: Increase in the gas tax, what is the proposal? What is the best proposal? And does it make sense?
TONY BRADLEY: Currently not a proposal in the state of Arizona. And I think that is because -- I feel bad for the gas tax, in my view, it is a user fee. The more fuel you use, more you drive on the roads, the more you pay into the system. But we make it sound like it is a sin tax. Gas tax is a bad thing. We don't want anybody to pay it. We don't want to raise it. We haven't raised it since 1993. There is discussion about the gas tax is always on the table. But there has been inaction at least for the last 20 plus years. Before 1993, something we raised from time to time, adjusted for inflation. Legislature -- roads are nonpartisan, they're not republican, they're not democrat, and they were able to increase those with our needs. We haven't done that in 20 plus years.
TED SIMONS: Because we haven't done it in 20 plus years, you have 1993 as the benchmark there. Whether it is flat or not, it is there as a marker. Construction costs must have increased since then, and I know that gas efficiency has increased. That means you are getting less revenue.
TONY BRADLEY: Getting less revenue. We are not getting anymore revenue into the system. Construction costs have gone up significantly. The cost of everything has gone up because it wasn't indexed in 1993, we have lost that buying power. It's about 70% of the buying power and as states have grown, we are starting to see more congestion. We are starting to see our roads deteriorating outside of Maricopa County, where we do have the half cent sales tax.
TED SIMONS: Are there better ways, private roads, toll roads, miles driven as opposed to gallons used?
MICHAEL HUNTER: I think there are a lot of creative thoughts and debates we have been engaged in about how to fund this. There's a lot of nostalgia for the gas tax. Really a 1950s legacy tax. I mean, really when it started to be an important tax. And, so, it played its role, but it is not that popular. People are watching what is at the -- what the price is at the pump. That matters to people. People are looking for more gas efficient vehicles and don't want to translate that into an excuse to raise a tax to make up the difference. I don't think it would be a very popular tax although there is polling that suggests there may be an interest in it. There is also polling that would suggest that there is not so much interest, and what matters, I think, in the difference in those polls is what the proposal is. That matters a lot.
TED SIMONS: What makes sense to you?
MICHAEL HUNTER: One thing at least the -- the polling data shows is that the more you get into transit versus roads and highways. People care a lot about roads and highways. They want them to work. They don't want bridges collapsing, all of that sort of stuff. That matters to them. And probably would be willing to pay. That's where we get into the path of least resistance in Arizona, the sales tax. That is where we tend to go to solve a lot of public problems.
TED SIMONS: What do you think about that idea, moving some of the sales tax locations.
TONY BRADLEY: We believe in a user pay -- even adding 10 cents to the state gas tax would give about $323 million a year. To put that in perspective, we have about $20 billion worth of needs over the next 20 years. It doesn't get us all of the way there. But once we start dealing with sales tax, we start competing as an industry, with education, public safety, with the other things that sales tax pays for.
TED SIMONS: What makes best sense to you, is it 10 cents, increase with indexing, indexing alone? What works for you?
TONY BRADLEY: What our industry has advocated for a number of years, increase in the gas tax with indexing. Some talk of double indexing, dealing with fuel efficient vehicles, and vehicles that are not paying anything at all with electric hybrids, CNGS, we don't have a taxing method yet. We probably could raise the gas tax a reasonable amount. $10 a month is what the average Arizonan pays in state gas tax. Gas prices are down since a year ago over a dollar. Not that that is an excuse, like Michael said, the timing would work out.
TED SIMONS: About 30 seconds.
MICHAEL HUNTER: The sales tax ideas aren't necessarily good because you are competing with a lot of other things. Toll road ideas that I know the trucking industry tends not to like, but you see examples where it has played a role in answering the question.
TED SIMONS: We have to stop it there. Good discussion. Thank you both for being here. We appreciate it.
TONY BRADLEY: Thank you.
Tony Bradley: president and CEO of the Arizona Trucking Association, and Michael Hunter: vice president for state and fiscal affairs from the Goldwater Institute