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PHX Voters to Decide $33B Sales Tax

Increase to .7% sales tax would fund transportation priorities, maintenance through 2050

Phoenix City County faced a full house at their March 3 meeting. Council voted 6-3 to place a contentious $33B sales tax package on the November ballot. Photo credit: Luci Scott/The Arizona Builder’s Exchange

By Luci Scott for Arizona Builder’s Exchange

Phoenix voters will decide in August whether to pay a 0.7% sales tax for a comprehensive transportation plan that would fund more light rail, buses, streets, sidewalks, bike lanes and maintenance of the various transportation modes.

City Council voted 6-3 on March 3 to place the contentious $33B package on the ballot. Voting against the proposal were council members Sal DiCiccio and Bill Gates and Vice Mayor Jim Waring.

The vote came at the end of a 3 ½-hour meeting, much of which consisted of the council hearing from tax proponents and opponents in the audience. If voters approve the tax, it would be in place from Jan. 1, 2016, through the year 2050 and is expected to generate close to $33B.

The proposal was developed by the 34-member Citizens Committee on the Future of Phoenix Transportation, chaired by Mary Peters, former Secretary of Transportation under President George W. Bush and former head of the Arizona Department of Transportation. Committee vice chairmen were Marty Shultz and Maria Baier.

The committee had proposed a sales tax of 0.75%, but the council approved a motion by Councilwoman Thelda Williams to reduce it to 0.70%.

The original comprehensive transportation plan recommended to council included 18 more miles of light rail, 24 miles of high-capacity transit that could be rail, bus rapid transit or streetcar, and 75 miles of bus rapid transit. That could be scaled back in light of the council’s vote to reduce the proposal.

The plan would allow all bus stops to be shaded, and fund new facilities such as transit centers and park ‘n’ rides, and upgrades for compliance with the Americans with Disabilities Act.

Street improvements would include overlays, new bicycle lanes, new sidewalks, street modernization, and new roads and bridges.

Great Recession cut projected revenue

Phoenix currently has a dedicated four-tenths of a cent sales tax supporting public transit service approved by voters in 2000. The tax, called Transit 2000, generates the majority of funding for bus and light-rail operations in the city. Since then, the long-term goals of the program were hindered by two recessions, which resulted in $1B less revenue than forecast.

Schultz told the council that the comprehensive plan would provide more than $2.4B dedicated to street improvements focused on maintenance of existing streets; major street projects including new roads, bridges and street modernization; 170 miles of new sidewalks and 1,150 miles of bicycle lanes, 2K new street lights and asphalt for more than 750 miles of streets.

“A successful, effective transportation plan makes a difference in the economic development of a community,” Shultz said.

He said if the current 0.4% sales tax expires with nothing to replace it, it would mean a 60% reduction in bus and light rail service or less service than the level Phoenix had in 2000. Likewise, if the 0.4% tax remains but is not increased, it would still mean a reduction in rail service and delays of all light rail projects of three to five years, and no improvements to streets.

The committee’s recommendation earmarked 30% of revenue for street improvements, 25% toward light rail and 45% toward bus service.

In explaining his vote for placing the measure on the ballot, Mayor Greg Stanton said, “This is going to improve the lives of people throughout this city. … Public transportation improves quality of life and also improves the economy. It’s one of the great economic development tools.”

Public-private partnerships predicted

Stanton predicted that if voters approve the tax, public-private partnerships would be created.

In explaining his opposition to the measure, Council member Sal DiCiccio sounded several warnings, saying that regardless of what this council promises, a future council can reallocate the funds and that if the tax is approved, there is less likelihood of getting more money for education.

Several members of the A/E/C industry see benefits to the tax.

Jennifer Donaldson, Deputy Project Manager for Stacy and Witbeck, working on the 19th Avenue light rail extension from Montebello to Dunlap, said the new revenue would speed up future projects by a few years.

Karl Obergh of the civil engineering and surveying firm Ritoch-Powell & Associates said that passing the tax would create a lot of jobs, and that without improved transportation, Phoenix would fall further behind other cities such as Portland, Seattle, New York and Vancouver, Canada.

Light Rail Increases Rents, Decreases Vacancies

Mark Davis, a developer, investor and a principal in Davis Enterprises, has six projects near the light rail, including the popular Starbucks/Pei Wei corner at 7th Avenue and McDowell.

“What we’ve noticed is that … light rail has provided for higher rents and better sales for our tenants.”

Davis also predicted that light rail expansion would mean a shot in the arm for currently underserved areas of the city.

“With the expansion of light rail that’s planned, I think you can expect people to focus on creating more unique retail experiences that are tied to parts of town that maybe have been dormant.,” he said. “It’s going to open up a lot of possibilities and opportunities.

The Citizens Committee was not unanimously supportive of the details of the proposal; a committee member who disagreed was Roy Miller, who said, “Too much money is allocated for rail because this mode of transportation is a 19th Century solution to the 21st Century problem. It is wasteful, inefficient, inflexible and adds to both congestion and pollution.”

He said Phoenix voters should focus on cheaper solutions such as better road maintenance, time-of-use pricing (also called congestion pricing), traffic-light synchronization, HOV lanes on the freeways, and point-to-point transportation alternatives such as Uber, Lyft and RideShare.