By Roland Murphy
AZBEX and BEX Companies are dedicated to covering and supporting the Architecture/Engineering/Construction industry in Arizona. From our inception more than a decade ago, our operating mission has been: “We help our subscribers find work.”
That focus has been both broad enough to allow us to cover a wide range of topics and narrow enough to keep us from wading into any number of social and political quagmires. We’ve also exercised a fair amount of restraint because both Founder and President Rebekah Morris and Managing Editor Roland Murphy hold the old school view of journalism and reporting that we should report the facts as objectively as possible and trust that our readership is responsible enough to form its own opinions when provided with factual information.
There are exceptions, however. Just as we have occasionally called out flawed project plans, we have also reported on public policy that is stilted in its potential impacts on the industry or the overall economy.
While we will do our best to not get overly political, we are compelled to go “once more unto the breach” and bring our readers’ attention to the current state of legislative proposals concerning the renewal of Proposition 400—the half-cent sales tax providing funding for transportation in Maricopa County.
The Current State of Prop 400
As we reported in a Special Coverage edition last October (here, here, here and here), the current half-cent sales tax is set to expire at the end of 2025. The Arizona State Legislature must pass legislation to put the measure on the ballot for voter approval if it is to be renewed. Like any other law, that legislation must be signed by the Governor in order to go into effect. (AZBEX; Oct. 14, 2022)
While the Legislature overwhelmingly approved sending the question to the ballot last year, Gov. Doug Ducey vetoed it, to the surprise of observers on both sides of the aisle. Speculation was rampant as to why, but his official objections were:
- The 25-year funding timeline, which the Governor called “a tax increase,” since the previous renewal was for 20 years;
- The recent expansion of other funding sources, such as the Infrastructure Investment and Jobs Act, and
- A reduced focus on freeway projects.
Having spent thousands of words discussing the history of the tax, its status as an economic development engine and the near- and long-term impacts of possible renewal or failure already, we will not rehash those points here. We will, however, remind readers that the measure that was passed by the legislature—House Bill 2685—was the result of extensive research, discussion and negotiation and that it had the unanimous endorsement of the leaders of all 32 member agencies in the Maricopa Association of Governments, as well as wide support among economic development officials, outside analysts and the general public.
Suffice it to say, the veto left supporters—spearheaded by MAG—scrambling to find a new path to the ballot so the measure could earn either renewal or rejection by voters.
Pending Legislation Snapshot
There are currently three bills under consideration to put a Prop 400 renewal, known as Pro 400E, back before voters: Senate Bill 1505, Senate Bill 1122 and House Bill 2527.
SB 1505 was introduced by Sen. Frank Carroll (R-Dist. 22) and mirrors last year’s HB 2685, which he introduced while serving in the House.
HB 2527 was introduced by Representative Leezah Eliza Sun (D-Dist. 22) and strongly mirrors 1505, except that it takes into account items from Ducey’s veto, including changing the timeline for the tax from 25 years down to 20.
SB 1122, however, is a truly worrisome piece of legislation. Introduced by Sen. David Farnsworth (R-Dist. 10), 1122 is a renewal of Prop 400 in name only. While it does, in fact, call for putting a renewal on the ballot, the bill creates major changes as to how transportation tax revenues may be distributed and used, sets aside the long-range transportation plan and functionally eliminates the existing regional transportation system. In short, it effectively defunds Valley Metro.
As the system currently exists, Prop 400 revenues are allocated at 56.2% for freeways and other routes, 10.5% for major arterial street and intersection improvement, and 33.3% for “transit operations and only capital and utility relocation costs for light rail projects,” according to information from Valley Metro.
Prop 400 does not fund annual operations and maintenance costs. Those are paid for by the rail cities.
SB 1122 reallocates funding as 80% to freeways and other routes, 15% for arterial streets, 5% for Dial-a-Ride and extending or adding new bus routes and Bus Rapid Transit.
For those not familiar with the program type, Valley Metro describes BRT as “a high-capacity bus service that operates throughout the day on dedicated lanes on major roads with a focus on improved speed, reliability, convenience and overall transit experience. There are no existing BRT routes in the region.”
What truly has light rail, general transit and multi-pronged transportation supporters up in arms, though are the additional points under the bill.
Again quoting Valley Metro’s summary, SB 1122 also:
- Prohibits the expenditure of excise tax revenue on all forms of rail (commuter rail, light rail, streetcar & and trolley).
- Removes the requirement that the regional investment plan developed by the MAG Transportation Policy Committee be multimodal.
- Removes the requirement for MAG to determine a mix of alternative public transportation modes.
- Eliminates Valley Metro’s bonding ability.
- Removes transit representation from MAG’s Transportation Policy Committee.
- Requires MAG to identify and incorporate privatization.
Cutting the public transportation allocation from 33% down to 5% would result in to an annual cut to Valley Metro of $244.5M.
The legislation is not a renewal of Prop 400. It is taking out a contract on the entire regional public transportation system as it currently exists.
On Feb. 3, Friends of Transit, a non-profit organization supporting Valley mass transit programs, hosted a virtual meeting to discuss opposing HB 1122. An unofficial tally during the meeting estimated approximately 50 attendees.
Expressed opposition to the legislation was unanimous and most, if not all, of the speakers from FoT, Valley Metro and MAG referred to HB 1122 as a “non-starter,” saying it was too deeply flawed to be revised into a usable piece of legislation that would actually maintain or improve area transportation.
Luckily, the chances of the bill becoming law are remote. It has a hearing in the Senate Transportation and Technology Committee on Feb. 6 and a second Feb. 13. Sen. Farnsworth is expected to ask for a vote following the Feb. 13.
The bill is not expected to advance out of committee. If it does, it is not expected to pass the full Senate. If it does, it is not expected to pass the House. Lastly, if it does, it is not expected that Gov. Katie Hobbs will sign it.
As a reminder that nothing is ever permanent, perfect or too safely predictable in politics, however, keep in mind that no one expected HB 2685 to be vetoed last year.
The Conservative Case Against Transit
A wide swath of right of center politicians and constituents oppose transit programs to varying degrees. Contrary to talking points that get progressively more histrionic the farther left of center one goes, this does not stem from a hatred of poor people or a “let them eat cake” mindset.
There are actually debate-worthy aspects to conservative transit opposition that could be valuable topics of discussion in a less divisive environment than is likely to be found on the current political stage.
Key points of opposition include:
- Public transit’s association with European-style socialism: Public transit in “democratic socialist” countries is seen almost as a civil right. U.S. conservatives oppose the expansion of European-style socialist programs and policies as infringing on market-based solutions to domestic issues. Since the widening of these programs in the U.S. post-2008, transit, particularly rail, has gotten painted with the same broad brush.
- Fostering dependence on government: Conservatives generally oppose social welfare efforts that are seen to foster a permanent, rather than transitional, dependence on government programs. The wider the cross-section of the population those programs are intended to encompass, the greater the opposition. Individually focused (i.e., automotive-based) transportation solutions are seen as fostering independence, whereas public transportation is seen as pushing the population toward increasing dependence on the state, promoting voluntary waivers of privacy and serving one portion of the population at the direct expense of another.
Conservatives have argued that for the cost to develop and implement public transit programs nationally, the government could just buy every citizen a car. The obvious liberal counterargument is that no conservative has ever actually proposed doing so, much less funding the costs to maintain and operate the cars or funding the vast roadway expansions such an expansion would require.
- Drain on public funds: Public transit programs do not come close to paying for themselves directly. According to Valley Metro’s July 2020-July 2021 System Fact Sheet, passenger fares cover 0.66% of operating costs for buses and 2.83% for rail. Buses have an operating cost of $13.37 per passenger, while rail costs per passenger are $8.56. Even without an accompanying social agenda, these numbers are difficult for fiscal conservatives to accept.
It is that last point, however, where numbers can be countered with numbers, and even by other core conservative arguments. Just as the national Interstate Highway System instituted by President Eisenhower in 1956 spawned multigenerational private investment and economic development, so, too, has the Valley’s transit system launched unprecedented growth.
According to Valley Metro’s Fall 2021 brochure “Valley Metro Rail Supports Economic Vitality,” total public capital investment for light rail totaled $3.7B, while private investment was $12.4B. A total of 493 development projects totaling 59.6MSF had been undertaken in proximity to light rail, with a breakdown of 2% public (1.1MSF), 12% education (6.9MSF), 36% residential (21.9MSF/35,168 units), and 50% commercial (29.7MSF).
When the cost offsets between rail implementation and the ripple effect on construction/rent/sales taxes, commercial and consumer spending and other private monies generated for the usage impact area are factored in, “directly” becomes the only relevant word in the sentence, “Public transit does not directly pay for itself.”
When coupled with the economic development benefits of the freeway and arterial advances funded by Prop 400—not the least of which was Taiwan Semiconductor Manufacturing Company’s decision to locate here—it is difficult for honest conservatives to argue against or attempt to weaken the expressed goals of Prop 400 and its Momentum 2050 implementation program.