Knowing the Numbers: New Auditor General’s Report Shines Light on Arizona’s Real Transportation Needs

An essential step to planning for our state’s future transportation system is to have an accurate accounting of infrastructure needs relative to revenues appropriated or dedicated for transportation projects. Arizona’s Auditor General recently released a performance audit for the Arizona Department of Transportation (ADOT) which provides this very information. The auditors conducted a thorough internal investigation of ADOT’s finances, transportation plans and road condition data. They compared this to applicable national data and reviewed relevant statutes and rules at all levels of government. As Accelerate Arizona continues its statewide tour of local communities in an effort to understand regional transportation needs, we can draw upon this new information to put together a comprehensive picture of our state’s transportation situation.

Several highlights stand out in the Auditor General’s report. First, revenues have not risen appreciably since around 2000. This is due in large part to a decline in gasoline sales that began in earnest during the Great Recession but has never recovered. Gains in fuel efficiency and increased use of alternative fuels, while positive for the environment, have contributed to the flattening of revenues. Currently no mechanism exists in Arizona to capture comparable revenues from hybrid or extremely fuel efficient vehicles.

Second, current revenues do not come close to meeting infrastructure needs. In fact, there is an estimated shortfall of $62.7 billion between 2010 and 2035. ADOT is responsible for both preserving the existing transportation system and expanding it to meet the needs of a growing population. Deferred maintenance is a particular problem because it costs taxpayers far more to reconstruct damaged roads than it does to keep them in good shape in the first place. Individual drivers also pay a premium for driving on poorly maintained roads. The American Society of Civil Engineers (ASCE) estimates that Arizona drivers fork out an estimated $1.5 billion each year in additional vehicle repairs and operating costs due to lousy road conditions.

Anyone who has a rush hour commute is aware that traffic is a frustrating problem that has real economic impact in terms of lost productivity. ASCE estimates that 41% of Arizona’s major urban highways are congested. Not only does traffic affect individuals trying to get to work or other activities; it also has a significant effect on delivery and service vehicles.

The Auditor General’s report offers up a variety of revenue options but appropriately defers to the legislature for selecting the option that best meets the needs of Arizona’s taxpayers and motorists. Several options center around the fuel tax – raising the current cents-per-gallon tax, indexing it to inflation or making the gas tax a percentage of the price of fuel tax. Toll roads, while controversial, are allowed under Arizona law. Other options are more revolutionary, such as a tax based on vehicle miles traveled (VMT) similar to what the state of Oregon is piloting now. Revenue sources not linked to transportation, such as an increase in the general sales tax, are another possibility. Finding a way to make drivers of alternative fuel vehicles pay their fair share to maintain the roads they use is an emerging challenge that our leaders must address.

Let’s encourage our legislators to follow the Auditor General’s recommendation to study the funding options and offer solutions that will not only sustain our current transportation system but also enable us to build for the future. Our economy depends on it.

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