Otter again backs higher road taxes

BOISE – Gov. Butch Otter has reiterated support for increasing state transportation taxes and fees by $200 million to pay for Idaho’s roads, an issue that could be one of the main themes of the 2008 Legislature.

In November, the Idaho Transportation Department introduced the plan to boost the state’s 25-cent-per-gallon gas tax, as well as fees for registration and agency services.

In March, Otter said the move would likely be necessary, in part because of an expected federal funding shortfall that could leave Idaho billions of dollars in the red over the next 20 years when it comes to paying for its highways and bridges.

This week, Otter again said the costs of fixing roads such as U.S. Interstate 84 through Southern Idaho and U.S. Highway 95 that runs north and south the length of the state are outpacing the state Transportation Department’s roughly $500 million annual budget and its $1 billion “Connecting Idaho” bonds-for-roads program.

“I feel obligated right now to step up forward and say, ‘Folks, I’m sorry, but we’ve got to have it,’ ” Otter told the Idaho Statesman this week. “I think we’ve got to prepare the environment, and when folks say ‘I’m sick and tired of paying taxes,’ well, folks, I’m sick and tired of paying taxes. But we’ve got to look to the need. We’ve got to look to the economy.”

In November, the Idaho Transportation Board recommended a package that included boosting the fuel tax, raising vehicle registration fees by 75 percent, and a new state surcharge on rental cars. Other proposals would increase fees by 75 percent for trucking permits and Transportation Department services, and introduce road-related impact fees on new construction, as well as eliminating an ethanol tax exemption.

The plan didn’t win traction in the 2007 Legislature, but Transportation Department Director Pamela Lowe said lawmakers are now aware of the problem.

Lowe said Idaho’s predicted $6.1 billion shortfall in highway funding over the next 30 years requires changes.

“I’ve had districts asking me for pothole patching that I can’t fund,” Lowe said Thursday. “We’re still looking at needing at least $200 million in additional revenue per year. Given inflation, that could even be more than that.”

She’s met with city leaders, trucking organizations and chambers of commerce across Idaho following the 2007 Legislature. Lowe said her agency has also been working to reduce its costs, but “we can’t narrow the $200 million gap per year. At some point, we’re still going to need a revenue increase.”

Still, not everybody is in favor of an increase.

Rep. JoAn Wood, R-Rigby and chairwoman of the House Transportation Committee, blames interest payments on the Connecting Idaho program’s bonds for sapping federal highway money that would otherwise be spent on Idaho roads as one culprit in future spending shortfalls.

“If the governor brings it as part of his package it’ll probably be on the agenda and get printed,” said Wood, a tax hawk who also sits on the conservative House Revenue and Taxation Committee, which must sign off on any proposed increases.

“Whether it gets passed or not, that’s another thing.”