Our current transportation system in Central Texas is broken and doing nothing is no longer an option. In order to fully fund a comprehensive transportation plan, plus invest in reducing congestion from today’s levels, we must consider all funding options including increasing Sales, Property, State and Federal gas taxes as well as User Fees like tolls and bus fares.

As announced in January, the Austin Chamber of Commerce has formed the Take on Traffic initiative, which includes a coalition of concerned citizens and local business leaders, who have come together to promote a plan that includes new roads, new lanes on existing roads, new rapid bus service, and new passenger rail service.

What is the best way to fund these much needed options?

Sales Tax
Sales tax is the main funding mechanism for mass transit, like Capital Metro. Capital Metro is largely funded by a one cent sales tax applied just within their service area which doesn’t cover our entire region. Even recent sales tax increases are not keeping up with demand and, at the current rate, expenditures will exceed revenues in 2011. This is largely the due to higher fuel and labor costs and fewer federal dollars. To address congestion with transportation choices, Capital Metro needs to expand current bus service, implement rapid bus, and implement and expand passenger rail investments over the next 25 years. However, funding is not there to support these efforts.

Gas Tax
Central Texas roads are built with state and federal gas tax money as well as other user fees. Many people believe that gas tax alone pays for our road system and an increase would raise enough money to solve our problems. That is not the case.

State — Our state gas tax has not been raised since 1991 – it has not kept up with inflation for the last 15 years. Additionally, not all of the state’s gas tax goes to solving transportation issues. In 2006, the state gas tax generated $3.1 billion in gas taxes, but only $1.4 billion was spent on transportation. The majority of that money is dedicated to rebuilding existing roads and bridges. New capacity funding is scarce and is divided around the state. So, Austin has to compete with Houston, Dallas, San Antonio and the rest of Texas for a share of this money.

The State use to collect $1.34 for every 100 miles driven. Taking into consideration inflation, they now receive just 56 cents for every 100 miles driven.

Federal — The federal gas tax has been the same rate since 1997. Now, the federal government is rescinding millions of dollars in transportation funding. Just two months ago, they asked Texas for nearly $300 million back.

“To actually reduce congestion and make up for the unfunded parts of our local transportation plan, we need approximately $12.7 billion above the funds currently anticipated from traditional funding sources,” said Paul Saldana, President, Greater Austin Hispanic Chamber of Commerce.

A number of options exist. To raise $12.7 billion locally over the next 20 years, property taxes could be raised by $0.62/$100- or about $1,200 on a $200,000 home. The sales tax could increase from 8.25% to 11.75%, and the local gas tax could jump by 72 cents meaning today’s $2.89 gallon of gas would cost $3.61.

“If you think these numbers are high, we used basic math and didn’t account for inflation,” said Gary Farmer, Chairman of Take On Traffic. “We asked the experts and their numbers were even worse. Even implementing a combination of these tax increases adequately would be devastating to our community.”

The Take On Traffic coalition believes that we cannot rely on any of these funding sources individually to fund the gap, but instead must use all of them in some combination with user fees in the form of tolls and fares. With user fees, the public gets to choose whether they pay the extra cost or not. Plus, by tolling, projects can be accelerated so that needed capacity can be delivered much sooner with less disruption of traffic.

“Lets quit talking about what doesn’t work and start working on solutions,” Farmer said. “To protect our quality of life – now and in the future – it’s time to move Central Texas in a new direction.”

Improving regional mobility is a long-term priority of Opportunity Austin, the Chamber’s five-year initiative to create 72,000 new jobs by 2008. More information can be found at www.takeontraffic.com