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Arizona $89B Transportation Dollars Short of “Being There Yet”

By Eric Jay Toll for The Arizona Builder’s Exchange

Photo Credit: HOK

Touting the need to create jobs to improve the economy, few legislators seem interested in taking one simple step to boost job creation and retention by spending to maintain and improve the Arizona transportation system. In one of America’s fastest-growing states, there’s a $63B revenue spending shortfall. This pulls the rug out from under creating and sustaining more than 2M jobs throughout the economy over the next 25 years.

That’s one of the conclusions of an October report issued by Arizona Forward (formerly Valley Forward), “Are We There Yet?” assesses the role of transportation as it drives Arizona’s growing global competitiveness. The report’s conclusions are sobering. The state revenue stream is barely adequate to maintain the current transportation system—which is inadequate to serve the needs of the state’s existing 6.4M residents. With the population expected to nearly double to 11.6M in the next two decades, it’s a problem.

Every $1B Invested in Transportation Means 46K Jobs

Global competitiveness requires Arizona’s transportation system to be responsive to the broad definition of transportation—airports, trains, trucks, commuters and recreation. Providing the transportation system to maintain a growing economy requires at least $89B be invested before 2035. To truly be competitive and meet long-range needs, $250B is needed, according to Arizona Forward.

Every $1B spent on transportation creates or retains 46K jobs across the economy—directly in construction and indirectly in support and spinoff positions. The report is based on ADOT’s long-range transportation plan, “What Moves You Arizona.”

Funding Not Keeping Up with Transportation Needs

Current transportation funding comes from the federal government, where Congress trickled a two-year package of transportation dollars to the states—far less than is needed to just maintain the system and make needed upgrades.

The rest of the money comes from the state’s Highway User Revenue Fund (HURF), a savings account consistently raided over the past three budgets to balance the state’s general fund. Local voters have passed various funding propositions, such as proposition 400 in Maricopa County, providing revenue for local transportation projects. Without sufficient state and federal dollars, local taxpayers are taking on a larger burden for building and maintaining the transportation network.

The recession and public sector transportation spending cuts are undermining the state’s ability to compete for global business growth. Lack of funding makes progress on the I-11 Canamex corridor an excruciatingly slow reality.

Completing the freeway systems, enlarging airport capacities and expanding public transportation are all underfunded objectives. This lack of revenue makes it challenging for ADOT and the state’s five transportation planning organizations to move plans to construction—and thus create more jobs.

Arizona Forward cautions that rural areas will suffer from lack of job and tourism growth if the transportation systems fail to keep up with their maintenance and capacity requirements.

New Approach to Funding Needed

The nonprofit, nonpartisan organization points out that recent surveys show 70 percent of Arizonans are not happy with the current transportation system. It suggests that more stable, protected and ongoing revenue sources are needed. Steady revenue streams are required to be competitive. The requirement goes beyond non-existent “public-private partnerships” and speculative “toll-based revenue”—the only recent solutions suggested by the legislature.

As each year passes, 2012’s $89B in 2012 grows each year projects are deferred. By 2035, as the population continues to grow, the opportunity to spread the tax burden decreases. This puts a bigger burden on future taxpayers caused by a lack of effective action today.